Thurston County bankruptcies rose 10 percent to 1,270 in 2010

Thurston County bankruptcy filings rose to 1,270 in 2010, a 10 percent increase over 2009, and experts say the pace of filings likely won't decline in the new year because unemployment remains high and many people still are struggling with their mortgages.

“Until those underlying factors improve for people, I would expect to continue to see families need to file bankruptcy,” Olympia bankruptcy attorney Jennie Patton said Friday.

Total bankruptcy filings also rose in Western Washington, up 10 percent to 26,877 last year from 24,255 in 2009, according to U.S. Bankruptcy Court data for the Western District of Washington.

Last year wasn’t a record year for the Western District, but filings have steadily increased since the bankruptcy code was changed in 2005. Many rushed to file before those changes took effect; about 35,000 bankruptcies were filed in 2005. The number then fell to 8,459 in 2006 before starting an upward trend.

Of the 1,270 bankruptcies filed in Thurston County last year, 952 were Chapter 7 filings, followed by 312 Chapter 13 and six Chapter 11 filings. In 2009, the county had 859 Chapter 7 filings, 282 Chapter 13, seven Chapter 11 and four Chapter 12 filings.

A Chapter 7 filing is considered straight bankruptcy, and a Chapter 12 filing is reserved for family farms; Chapter 11 typically is filed by a business to restructure assets and remain in business, while Chapter 13 filings can result in a payment plan.

Although most were personal bankruptcy filings last year, likely filed under Chapter 7 of the U.S. bankruptcy code, the county did have one high-profile Chapter 11 filing in August as South Sound developer Tri Vo sought protection for Hawks Prairie Investment LLC, a company set to develop 337 acres near the outdoors store Cabela’s.

There, too, are those who file bankruptcy because of medical bills, divorce or a death in the family.

Paralegal Carlotta Strickland, 66, of Lacey filed Chapter 7 bankruptcy last year after her husband died.

But that wasn’t the only contributing factor: Her two children also lost their jobs – her daughter a longtime travel agent and her son a truck driver – and moved back home, she said.

Strickland suddenly found herself paying the mortgage and supporting her children on one income and Social Security. Adding to her troubles was that she had helped her son buy a truck, and after he failed to make payments, her wages were garnisheed. She said they held out for about 18 months, during which “it wasn’t real pleasant.” She finally let the house go back to the lender and filed bankruptcy. She now lives in a rented town house.

“It didn’t do anything to hurt me, and it helped me 100 percent,” Strickland said about her decision to file bankruptcy. “I live in my own place, and everything is a lot better than it was, except for my husband not being here.”

Rolf Boone: 360-754-5403 rboone@theolympian.com www.theolympian.com/bizblog