US bankruptcies resume upward path in 1st quarter

* Consumer filings up 18 pct, business filings up 2 pct

* Nevada has most filings per capita, Arizona filings soar

By Jonathan Stempel

NEW YORK, May 14 (BestGrowthStock) – U.S. bankruptcy filings
resumed their upward climb in the first quarter, nearly
equaling their highest level since 2005, as high unemployment
and a still-strained housing market squeezed consumers.

There were 388,148 filings between January and September,
up 17 percent from 330,394 a year earlier, according to data
released Friday by the Administrative Office of the U.S.
Courts. Consumer filings rose 18 percent to 373,541, while
business filings edged up 2 percent to 14,607.

Filings also rose 4 percent from last year’s fourth
quarter, the government data show. That had been the first
period with a quarter-to-quarter drop in filings since 2006.

For the 12 months ended March 31, there were 1.53 million
filings, up 27 percent from a year earlier and the most since
2006. Some experts expect the number to stay above 1.5 million
in future periods.

“We’re not anyway near through our housing situation, and
are going to see more foreclosures, perhaps for another three
years,” said David Jones, president of the Association of
Independent Consumer Credit Counseling Agencies in Fairfax,
Virginia. “The job situation is also serious. It’s not just
that people cannot find jobs, but many who have found jobs are
finding them at lower wages.”

First-quarter filings were the second-most since the fourth
quarter of 2005, when Congress overhauled federal bankruptcy
laws to make it tougher for people to file. They nearly equaled
the 388,485 filings in the third quarter of 2009.

According to the American Bankruptcy Institute, Arizona had
a 69 percent rise in total filings over the last year, the
biggest increase in any federal district.

On a per capita basis, Nevada had the most filings, with
11.7 per 1,000 people.

Both states have been among the hardest hit by the nation’s
housing and commercial real estate problems.

Tennessee ranked second per capita, followed by Georgia,
Indiana and Alabama. Among the most populous states, California
was 8th per capita, Texas 48th, New York 41st and Florida 15th.
Alaska had the fewest filings per capita, with 1.54 per 1,000
people.

In the quarter, about 73 percent of bankruptcy filings came
under Chapter 7 of the U.S. bankruptcy code, 26 percent under
Chapter 13, and most of the rest under Chapter 11.

Consumers use Chapter 7 to get a fresh financial start.
Chapter 13 lets people discharge some debts. Businesses often
use Chapters 7 and 11. Farmers use Chapter 12 of the code.

Stock Market

(Reporting by Jonathan Stempel, editing by Gerald E.
McCormick)

US bankruptcies resume upward path in 1st quarter