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Posted by: Maricopa Lawyers on Jan 30, 2013

Bankruptcy filings in Arizona declined for the second consecutive year in 2012, dropping more than 22 percent from 2011, according to the latest statistics from the U.S. Bankruptcy Court.

The metro Phoenix area in particular has been aided by a stronger job market, economic growth, and rising real estate prices. Down from 26,262 in 2011, Phoenix businesses and homeowners reported just over 20,000 bankruptcies in 2012, according to the U.S. Bankruptcy Court in Phoenix. Filings have fallen for 23 straight months with the last 18 decreases at double-digit rates.

Chapter 7 filings, which give debtors a clean slate after non-exempt assets are used to pay creditors, made up roughly 85 percent of filings in 2012 both in Phoenix and Arizona as a whole. This trend correlates with other research that indicates consumers are managing their debts better.

The American Bankers Association reported that loan delinquencies for consumers continued to drop in the third quarter of 2012. Additionally, past-due credit card accounts fell to an 18-year low with only 2.75 percent of card holders 30 or more days past due on payments.

James Chessen, the ABA’s chief economist, attributes this drop to the fact that consumers are paying close attention to their finances during these tough economic times.

Nationally, bankruptcy filings in 2012 marked a 14 percent decrease from 2011. The latest numbers from the U.S. Bankruptcy Court indicates that this is the lowest total of bankruptcies since the financial crash in late 2008. With interest rates dropping, frugal consumers, and continued deleveraging by households, bankruptcy filings should continue to decline in 2013.

Here is a breakdown of the bankruptcy statistics for the state of Arizona by major metropolitan areas

Phoenix

Type 2012 cases Percent annual change

  • Chapter 7 17,238 -22.1%
  • Chapter 11 309 -12.2%
  • Chapter 13 2,608 -30.6%
  • Total* 20,156 -23.2%

Tucson

Type 2012 cases Percent annual change

  • Chapter 7 4,515 -19.3%
  • Chapter 11 95 +14.5%
  • Chapter 13 984 -21.3%
  • Total* 5,595 -19.3%

Yuma

Type 2012 cases Percent annual change

  • Chapter 7 1,412 -17.3
  • Chapter 11 18 -14.3
  • Chapter 13 116 -26.1
  • Total* 1,547 -18.0

Arizona

  • Chapter 7 23,165 -21.3
  • Chapter 11 422 -7.5
  • Chapter 13 3,708 -28.2
  • Total* 27,298 -22.2

* Totals include three cases filed under special bankruptcy code chapters: one Chapter 12 (special family farmer or family fisherman filing) case filed in Phoenix, one Chapter 12 filing in Tucson and a Chapter 15 (cross-border) case filed in Yuma.
Source: U.S. Bankruptcy Court