Bankruptcies are accelerating in Washington, and more families in every region of the state are going to court for relief from banks and other creditors.
In the first three months of 2009, more than 7,000 people statewide declared bankruptcy, up 50 percent from a year ago.
And in March, every region of the state saw annual increases in personal bankruptcy filings of 30 percent or greater. Among the most populous counties, four saw annual increases of 60 percent or greater: Snohomish (322 filings), Clark (225), King (561) and Spokane (268).
Washington ranks fifth among the states – Nevada is first – in the annual per-capita increase in bankruptcy filings, according to AACER, a bankruptcy data and management firm.
Washington’s monthly growth in bankruptcies so far this year puts it fourth among the states in March.
In absolute terms, however, the state’s picture in March was better than many others: There were 4.35 bankruptcies per 1,000 people in Washington, ranking it 21st among the states, reports AACER.
Though bankruptcy holds off home foreclosure and other collection efforts, it is generally a last resort because of the damage it does to one’s credit score and lingering stigma.
The statistics capture only a fraction of families that have defaulted on their house, car or credit card payments.
“It’s a lot worse out there than we think it is. I’m booked out through May,” said Kent attorney Jay Jump, state chairman for the National Association of Consumer Bankruptcy Attorneys. “We are still hemorrhaging jobs and hemorrhaging wealth and hemorrhaging real estate prices.”
The state’s unemployment rate hit 9.2 percent last month.
Home prices are off more than 15 percent from their peak two years ago, making it hard for many families to sell their house and pay their debts.
“The primary driver for people filing for bankruptcy now is they’ve lost their job or the foreclosure is pending,” Jump said.