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What new bankruptcy numbers mean for the region

Updated: May 1, 2014 6:53AM



Bankruptcy filings for Northwest Indiana were down for the third year in a row in 2013, but that trend could end this year.

According to numbers from the U.S. Bankruptcy Court, the Hammond district saw a total of 4,487 filings last year, down 264 from 2012. Most of the decrease came in Chapter 13, or reorganization, which saw a drop from 2,159 filings in 2012 to 1,953 in 2013.

The most recent high in bankruptcy filings happened in 2010, when a total 5,838 cases were filed in the region. That number has dropped each year since.

However, David DuBois, a U.S. bankruptcy trustee, cautioned against reading too much into the decrease. A federal law that went into effect in late 2005 extended the time people had to wait to file for bankruptcy again to eight years — a time period that would have just ended this past fall for those who were the first to file under the new law.

DuBois said he remembers fall 2006 as much busier than normal, and 2005 still stands as having far more bankruptcy filings, with 9,371, than any other year in the past decade. Those people are now able to refile again, meaning the region could see an uptick this year, DuBois said.

“It’s going to be interesting over the next six months to see what transpires,” he said.

Micah Pollak, an assistant professor of economics at Indiana University Northwest, did give the declining trend some credit. He was concerned that Lake County’s dropping population could answer for the decrease, but said that becomes a moot point when looking at Porter County’s rising population.

“This is a legitimate decline, which is a good thing,” he said.

Pollak also noted that if 2004, which also had a relatively high number of filings, and 2005 were taken out, the numbers for last year would be about average for the past decade.

Although it would be better to see a larger drop in Chapter 7, or liquidation, bankruptcy filings, Pollak said, he thinks the drop in overall filings is yet another sign that the local economy is slowly getting better.

“We’re slowly climbing out,” he said. “Not as quickly as we’d like, but at least it’s something.”

DuBois did say he doesn’t expect to see such a large increase as 2005 saw. He said that for most people, going through one bankruptcy is enough to help them learn how not to go through another one.

“It really is a learning tool,” he said.



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