GRAND RAPIDS (AP) – The number of southwestern Michigan individuals and businesses who filed for bankruptcy protection soared 40.1 percent from 2000 to 2002 – and the trend is continuing this year.
Filings through February were up 12 percent from a year ago in U.S. Bankruptcy Court in Grand Rapids.
More than 6,000 individuals and businesses filed for bankruptcy in that court in 2001. That was an 11.7 percent jump over the year before, nearly double the national increase of 5.7 percent reported last year, The Grand Rapids Press reported Sunday.
“I haven’t had a vacation in over a year now,” Grand Rapids bankruptcy attorney David Anderson said. “I see so many more people unemployed than I ever have. And I see so many people employed making significantly less than they used to.”
In addition to rising unemployment, a slumping economy and easy access to credit has fueled the steady rise in the region’s bankruptcy rate, bankruptcy attorneys said.
“I think we will continue to see a rise in bankruptcies even if the economy picks up, and I think that is in part because of the marketing of debt,” attorney Todd Almassian said. “The attitude is, ‘If you can’t afford it, credit card it.'”
Teaching basic financial skills may give some people techniques to avoid bankruptcy, said Richard DeKaser, chief economist for National City Corp.
Bankruptcy Court Clerk Daniel LaVille said the increase has stretched his staff to its limits. Each of the three judges in the Grand Rapids court has about 5,000 cases.
Though the workload is heavy at times, the toll bankruptcies take on families is far heavier, said James Gregg, chief bankruptcy judge in Grand Rapids. Gregg is president of the National Conference of Bankruptcy Judges.
“It’s very sad to see people in the financial situations that they’re in,” Gregg said. “In nearly all the cases, people are in bankruptcy not through any choice of their own. They’ve encountered circumstances beyond their control.”
While individuals account for 98 percent of the area’s bankruptcy filings, businesses also are declaring bankruptcy more frequently. The number of businesses that filed in the western Lower Peninsula in 2002 rose 14.9 percent to 293.
Tool and die shops as well as suppliers to the automotive and furniture industries account for most of the filings, attorney Tom Sarb said.
“Every time it seems like things are starting to improve, you have something like (September 11) or the threat of war on Iraq,” Sarb said. “I think the uncertainty is just affecting everybody.”