On the heels of last week's jobs report, there's more good news for the Valley economy. Metro Phoenix bankruptcies continued to fall in September, hitting a seven-month low.
There were 1,421 bankruptcies filed in metro Phoenix last month, compared to the 1,999 filed in September of last year, The Arizona Republic reports. That's a 29 percent drop.
On a year-over-year basis, Valley bankruptcy filings have dropped at a double-digit percentage for 20 consecutive months.
That's not the only good news: Home prices are rising and loan delinquencies are on the decline. Past-due payments on credits cards fell to an 11-year low last month, according to the American Bankers Association.
"Consumers are saving more and borrowing less, as they work to pay down debt at a faster rate," the ABA's chief economist said in a statement. "Economic uncertainty has made consumers hesitant to take on new debt, and building a stronger financial base has become a priority."
Individuals who are facing large amounts of debt most often filed for Chapter 7 bankruptcy. In a Chapter 7 filing, the debtor's property is sold and the proceeds paid to his creditors. In exchange, the debtor is given an automatic stay, meaning his creditors are barred from collecting on their debts. In addition, the debtor's debts are discharged once the bankruptcy process is complete.
Businesses, on the other hand, often file for Chapter 11 bankruptcy. In a Chapter 11, the debtor company creates a reorganization plan, describing how it intends to pay off its debt and become profitable again. That often involves selling assets, closing branches, laying off workers, or renegotiating its contracts.
September's numbers reflect a statewide trend. For all of Arizona, the 1,950 bankruptcy filings last month were down 27 percent from the 2,685 in September of last year.