Utah bankruptcies up 62%

Utah bankruptcy filings are up 62 percent this year compared to the filings at midyear in 2008.

In the first two quarters of 2009, 6,817 bankruptcies have been filed, compared to the 4,216 filed by June 30, 2008, according to statistics provided Tuesday by the U.S. Bankruptcy Court for the District of Utah.

At the end of the first quarter '09, court clerk David Sime predicted that as many as 15,000 bankruptcies could be filed by the end of the year, if traditional monthly patterns hold true.

While the numbers are significantly higher each month in 2009 compared to the same time in 2008, they follow a previous-year trend in that March and April were the busiest filing months, followed by a slight drop in May, and a slight increase in June.

Still, the number of filings is relatively small compared to early this decade when nearly 22,00 cases were filed in a single year. In 2005, a new law greatly changed the process of filing for bankruptcy, making it more expensive. The new law also put new requirements on lawyers and mandated credit counseling and a budgeting class before someone can seek bankruptcy protection, Sime said.

Chapter 7, where assets are liquidated to pay debts, is the most common type of bankruptcy filed so far this year in Utah, with 4,403. The next-most-popular is Chapter 13, which allows "debt adjustment" for individuals. Between Jan. 1 and June 30, a total of 2,378 Chapter 13s were filed.

While last year no one filed a Chapter 12 "family farm protection" case, there have been two in 2009. The other 34 cases filed were Chapter 11, a reorganization most often used by businesses.

Utah's latest bankruptcy statistics are online at www.utb.uscourts.gov.

E-mail: lois@desnews.com