Region’s Bankruptcies A Growth Industry Local Filings Are Up 22 Percent As People Continue To Abuse Credit

Sat., Jan. 10, 1998

By Bert Caldwell bertc@spokesman.com (509) 459-5450

Bankruptcy filings in the Inland Northwest skyrocketed in 1997, proof - ironically - that the good times continue to roll.

Statistics from U.S. bankruptcy courts in Spokane and Boise show a 22 percent climb over year-ago activity in Eastern Washington, and a 30 percent jump in Idaho’s four northernmost counties.

Filings for Idaho as a whole also went up, 27 percent.

Figures for Western Washington have not been tabulated.

In Eastern Washington, the figures point to a continued abuse of credit by individuals, said Jo Jennings, data specialist for the Spokane court.

“People are living beyond their means,” she said.

Business reorganizations declined to 58 from 59. Filings by farmers dropped to 8 from 13.

But filings by individuals seeking to liquidate their debt increased 21 percent. The number who want to pursue a repayment plan under a separate chapter of the bankruptcy code was one-third higher at 1,152.

Business and farm bankruptcies represented a minuscule share of the total in Idaho and North Idaho, as well.

If the raw numbers are higher, the rate of increase is not. A year ago, Eastern Washington, North Idaho and the states of Idaho and Washington as a whole reported 30 percent-plus jumps compared with 1995.

Mark Harnishfeger, president of Consumer Credit Counseling of the Inland Northwest, said Friday he expects little change.

“It’s predicted to be equally as bad in 1998,” he said.

Harnishfeger said the agency, which helps consumers with education classes and debt-repayment plans, experienced a 17 percent increase in first-time clients last year.

Participation in education programs rose 32 percent, funds repaid to creditors 38 percent.

“We’ve had some real challenges managing the growth,” he said.

Harnishfeger said poor money management remains the No. 1 problem among clients, with credit card abuse leading the way.

And he blamed the region’s relative prosperity for overstimulated consumer activity.

“They’re more comfortable making the wrong choices,” Harnishfeger said.

, DataTimes ILLUSTRATION: Graphic: Bankruptcy Boom

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