Last week, we noted that national bankruptcy filings were on the decline. Fortunately, the Phoenix area is no exception to the national trend.
In June, metro Phoenix bankruptcy filings fell another 27 percent, The Arizona Republic reports. Last month saw 1,770 bankruptcy filings in the Phoenix area, bringing the total for the first half of the year to 10,867.
Metro Phoenix filings for the first half of the year were down nearly 24 percent compared to the first half of 2011, when 14,271 filings were made, according to the U.S. Bankruptcy Court for Arizona. Statewide filings dropped 25 percent last month and 23 percent over the first six months of 2012.
Both figures are in line with the national decline in bankruptcy filings. In June, the number of bankruptcies filed nationally fell 18 percent. The number of U.S. filings also dropped 14 percent in the first half of the year.
Samuel Gerdano, executive director of the American Bankruptcy Institute, attributed the decline to lowered interest rates. However, others contend that the drop in bankruptcies was due to greater responsibility among consumers.
“Consumers have done a remarkable job getting their finances under control,” James Chessen, chief economist for the American Bankers Association, said. Delinquencies fell in 10 categories tracked by the association, with credit-card delinquencies falling 3.08 percent in the first quarter.
Chapter 7 bankruptcies dominated filings throughout the area, accounting for 86 percent of all metro Phoenix bankruptcies. Generally, Chapter 7 is the most common form of bankruptcy for individuals. In a Chapter 7 bankruptcy, the debtor’s property is liquidated and the proceeds are paid to the debtor’s creditors in the order of their priority. Nearly all debts are discharged and the debtor is given a fresh start.
- Bankruptcy Filings in Metro Phoenix Fell in June (Fox News)
- Filing for Chapter 7 (FindLaw)
- Pros and Cons of Chapter 7 (FindLaw)
- Sorry, Bankruptcy Lawyers: Bankruptcies Drop 14 Percent (FindLaw’s Phoenix Bankruptcy Blog)