Personal bankruptcies on rise in Nevada

Monday, March 9, 1998 | 8:47 a.m.

Nevada ranked fourth nationally in the number of personal bankruptcies last year, with 7.7 of every 1,000 residents filing for protection against creditors.

Court records also found the number of such filings nearly doubled in the last six years, from 6,614 in 1991 to a record 12,412 last year.

The statistics reflect a nationwide trend as a record 1.3 million Americans filed for personal bankruptcy in 1997. Tennessee had the highest rate, followed by Georgia and Alabama.

Bankruptcy attorneys and debt counselors blame most of Nevada's cases on credit card misuse and medical bills. People also are more willing to file because bankruptcy has lost its stigma, they said.

"People are finding bankruptcy more of a convenience than a necessity," said Bruce Rodela, Washoe Credit Union president. "I really believe people need to take responsibility for their own actions."

Mining-dependent rural counties reported the largest increase in personal bankruptcy filings in Nevada last year, according to a Reno Gazette-Journal computer analysis of court records.

The number of cases jumped 110 percent in Lander County and 81 percent in Elko County.

"I'm seeing a lot more bankruptcies in the Elko area with the mines closing," said Ione Jackson, a federal bankruptcy trustee based in Elko. "I do expect it to happen more and more until the miners go back to work. It's a sad situation."

More than 700 Nevada miners have lost jobs since December as the price of gold plummeted to an 18-year low of $280 an ounce, making some mines unprofitable.

Despite its explosion of mega-resorts, Clark County remains the state's leader in personal bankruptcy filings.

Nearly 9 percent of every 1,000 county residents sought protection from creditors last year, the highest rate among major U.S. cities, court records found.

Carson City had Nevada's second-highest rate, with 7.4 of every 1,000 residents filing for personal bankruptcy in 1997.

In Washoe County, personal bankruptcies remained steady from 1991 to 1995, increasing only .5 percent. But filings shot up 12.5 percent in 1996 and 22.4 percent in 1997.

Robert Barone, chairman of Reno-based Comstock Bank, said all people pay for bankruptcies through higher interest rates credit issuers charge.

"It costs everyone more to get credit," Barone told the Gazette-Journal. "Banks have to absorb the loss due to bankruptcies."