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Chapter 7 bankruptcy filings double
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Filings for Chapter 7 bankruptcy, which doesn’t require any debt repayment, soared more than 95 percent in the first quarter compared with first-quarter 2008 across Arizona and the Valley.
That’s according to the latest statistics from the U.S. Bankruptcy Court of Arizona. Valley filings for Chapter 7 jumped 97.7 percent, from 1,867 to 3,691, while statewide filings jumped 96.2 percent, from 2,607 to 5,115.
The first quarter followed last year’s jump in Chapter 7 filings, when Valley filings soared to 10,934, compared with 5,378 in 2007, and statewide filings jumped from 8,008 to 15,177.
Filings for Chapter 13 bankruptcy trailed far behind Chapter 7 filings. Valley filings increased 29.8 percent from 570 to 740, while statewide filings increased 35.1 percent, from 773 to 1,044.
All bankruptcy filings were up 82 percent during the first quarter compared with first-quarter 2008 both in the Valley and statewide. In the Valley, overall filings increased from 2,490 to 4,530, while statewide overall filings increased from 3,455 to 6,288.
“It’s been a busy quarter,” said Brian Karth, clerk of the court. “March, in particular, was the highest month of filings we’ve had since October 2005. We had 2,700 in March (compared with 1,414 in March 2008).”
The first quarter is usually a time when many people assess their financial situations and make decisions concerning their financial futures, he said.
“It’s typical for springtime to trend upward in these filings, but it was surprising that March was as high as it was.”
The Chapter 7 volume includes homeowners who, in the past, probably would have filed Chapter 13 in an effort to stay in their homes, said Raymond Steele, a bankruptcy attorney in Chandler. Chapter 13 enables individuals with regular income to develop a plan to repay all or part of their debts.
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