Bankruptcy filings up in nation, Las Vegas

Friday, May 16, 2003 | 11:31 a.m.

SUN STAFF AND WIRE REPORTS

The record-setting pace of new personal bankruptcies has continued this year, rising 7.4 percent in the 12 months ended March 31, according to data released Thursday.

The upward trend had been expected to continue this year in a sluggish economy and as the effects still linger from the consumer spending binge of the 1990s.

"There is still a big slug of individuals with problem debt still working their way through the (bankruptcy court) system," said Samuel Gerdano, executive director of the American Bankruptcy Institute, a group of bankruptcy judges, lawyers and experts.

As is normally the case, most bankruptcy filings were by individuals.

The data compiled by the Administrative Office of the U.S. Courts show that new bankruptcy filings by individuals totaled 1.57 million in the 12-month period -- a new record -- up from 1.46 million in the 12 months ending March 31, 2002.

The number of new business bankruptcies fell by 5.8 percent to 37,548 from 39,845.

In line with the national trend, the number of Chapter 7 bankruptcies in Las Vegas jumped to 10,519 in 2002 from 9,423 in 2001, while Chapter 7 filings in first-quarter 2003 climbed to 2,562 from 2,276 in the same period in 2002, according to the U.S. Bankruptcy Court in Las Vegas.

The number of Chapter 13 bankruptcies also increased to 4,353 in 2002 from 3,971 in 2001, while Chapter 13 filings in the first quarter of 2003 rose to 1,115 from 1,100 in the same period last year.

But the number of new Chapter 11 bankruptcies in Las Vegas fell to 114 in 2002 from 120 in 2001. Chapter 11 filings for first quarter 2003 also dropped to 20 from 37 in the same period.

Consumer debt has reached record levels in recent years. But Federal Reserve data showed that consumers became more cautious users of credit last year, expanding their borrowing at the slowest pace in a decade. The rise in credit card and other revolving debt was the smallest increase since the Fed began keeping records in 1968.

Consumer borrowing rose by just 3.3 percent in 2002, a marked slowdown from the 6.9 percent increase posted in 2001.

The House and Senate last year approved legislation to overhaul bankruptcy laws to make it harder for people to erase debts in bankruptcy court, and President Bush signaled he would sign it. Sharp partisan differences over abortion, however, doomed a House-Senate compromise in November's lame-duck Congress. A similar bill overwhelmingly cleared the House in March, but the legislation faces less favorable prospects in the Senate. Banks and credit card companies have been pushing the legislation since 1997.