Arizona Bankruptcy Rates on the Rise

The United States Bankruptcy Court, District of Arizona, maintains bankruptcy statistics for all cases filed in Arizona.  The state of Arizona is listed as one of the top five states being hardest hit by both the mortgage crunch as well as the soft housing market.  Even though unemployment is lower than the national average, bankruptcy cases in Arizona have risen dramatically from 2006 until 2007.

In January 2006, there were 162 chapter 7 bankruptcies filed in the Phoenix court, 42 filed in the Tucson court and 8 filed in the Yuma court for a total of 212 chapter 7 bankruptcies.  In January of 2007 these numbers saw a dramatic increase.  The Phoenix court system processed 273 chapter 7 bankruptcies which represented a 68.5% increase.  In Tucson, the number jumped to 106 cases in January of 2007 equaling a 152.3% increase of January 2006.  In Yuma, the increase was even more staggering at 287% jumping from 8 to 31.  When comparing January 2006 to January 2007, chapter 7 bankruptcies filed in Arizona increased 93.3%.

As 2007 continued, the numbers rose and fell, but December 2007 showed a 102.7% increase over December 2006.  The total number of chapter 7 bankruptcies filed in December 2006 in Arizona was 367; this jumped to 744 in December of 2007.

Unfortunately, Arizona bankruptcy rates continued to rise in the early part of 2008.  The Arizona Republic has reported that there were 967 bankruptcy filings (all chapters) in January of 2008 which equates to a 63% gain from January 2007.  Of those 967 cases, 708 were from individuals and businesses in the Phoenix metropolitan area.

National bankruptcy rates dropped by 28% from 2006 to 2007, unfortunately Arizona’s rates did not follow this trend.    Consumers in Arizona are being hit hard by the predatory lending practices that resulted in numerous subprime mortgages.  These individuals are unable to refinance their home in order to prevent a foreclosure and many are being forced into bankruptcy. 

Prior to making this decision, it is important for consumers to consider the bankruptcy alternatives that are available.  If the consumer decides that bankruptcy is inevitable, it is important that he works with a knowledgeable bankruptcy attorney to ensure the best possible outcome and then get started on his life after bankruptcy.