Bankruptcy Filings Up 60 Percent in Arizona

Arizonans filing for bankruptcy up 60 percent

Russ Wiles
The Arizona Republic
Jul. 16, 2007 04:26 PM

Debt-strapped consumers are filing for bankruptcy protection in rising numbers, with the first-half tally in Arizona up nearly 60 percent.

Credit-card debt, higher mortgage payments, costly medical bills and other factors are driving the trend.

Still, bankruptcy filings are well below the record highs seen before a change in applicable laws made it more restrictive to file.

Some 895 applications were filed in the U.S. Bankruptcy Court for Arizona in June, the highest monthly total of 2007.

That raised the first-half filing sum for the state to 4,618 from 2,894 in the first half of 2006.

Filings in the Phoenix metro area rose 51 percent in June and were 55 percent higher for the first half, at 3,109.

"A number of people in subprime loans, with adjustable rate mortgages that are resetting, just can't afford to make the new (higher) payments," said Phoenix attorney Diane L. Drain, a bankruptcy expert and governor of the State Bar.

She also cited relatively new federal rules that require customers to make higher minimum payments on credit-card balances each month.

Yet Mike Sullivan, director of education at Phoenix debt-counseling firm Take Charge America, said he doesn't think the trend toward higher minimum payments has been a significant factor pushing people toward bankruptcy.

Rather, he cited the real estate slump and softer home values for removing a safety valve in the form of home-equity loans, which previously could be tapped to pay other debts.

"I'm alarmed by the number of people who are forced to give up (and apply for bankruptcy) because they have fewer options," he said.

Most bankruptcies involve consumers. Chapter 7 filings, which allow for liquidation of non-exempt assets to pay off debts and start fresh, account for more than half the total, but Chapter 13 filings are rising at a faster clip. They involve debt-repayment plans for people with regular income.

A change in bankruptcy laws in 2005 reduced the scope of protection and required consumers to seek credit counseling....

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Gambling's Ugly Side - Bankruptcy

Bankruptcy comes about due to many different circumstances. It is common knowledge that gamblers are at a higher risk of bankruptcy than non-gamblers. This story from The Kansan, about personal bankruptcy should be posted at the entrance of every casino:

Bankruptcy can be an ugly side of gambling

PUBLISHED: Saturday, June 23, 2007

By Cristina Janney

Newton Kansan

The therapist tried to reason with the man on the other end of the line. It was Friday night; he had taken his life savings out of the bank and was on his way to a Kansas casino.

Somewhere in the hundreds of words that spilled from her mouth as she attempted to get him to think about gambling his life away, she got through. He turned his car around and came home.

“I didn’t stop talking to him until he was back in his driveway, but there is nothing to say he wasn’t back at the casino the next day,” said the Wichita therapist, who did not wish to give her name to protect the identity of herself and her client.

“If you drink or do meth or cocaine, at some point you are going to pass out or die,” she said. “The harm stops, but that never happens with gambling. I know people who have gone 23 hours without stopping and been $25,000 down. When they reach the point they have no money, they find creative ways to find money. They are chasing the money — chasing their losses.”