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Bankruptcy filings rise nearly 50 percent in Thurston County

By Rolf Boone | The Olympian • Published April 19, 2009

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Thurston County bankruptcy filings rose nearly 50 percent in the first quarter of the year, another undesirable economic statistic in a region reeling from higher unemployment, fewer home sales and lower consumer spending.

The data, filed in the U.S. Bankruptcy Court for the Western District of Washington, show filings rose 47.7 percent to 226 in the first quarter of 2009 from 153 in the first quarter of 2008.

Of the first-quarter Thurston County filings this year and last year, all were Chapter 7 or Chapter 13 bankruptcies, the data show.

A Chapter 7 filing liquidates assets and eliminates debts, while the debtor in a Chapter 13 bankruptcy agrees to a full or partial repayment plan to creditors spread over three to five years. Another common filing, Chapter 11 bankruptcy, typically is filed by a corporation seeking to restructure its debts and remain in business.

Thurston County is not alone in recording more first-quarter bankruptcy filings, said Mark Hatcher, clerk of court for the Western District of Washington.

Filings are higher throughout Western Washington, he said, including in Pierce County, where bankruptcies jumped 50 percent to 958 in the first quarter of the year from 637 in the first quarter of 2008, the data show.

"The economy is the driving factor right now," Hatcher said about the overall increase in filings.

Generally, though, a lack of health insurance, divorce and money mismanagement are other causes that can result in bankruptcy, he said.

All of those underlying factors, however, have been exacerbated by the slower economy, Olympia bankruptcy attorney Jennie Patton said. It also has produced a different kind of bankruptcy client, she said.

"I've been seeing a more diverse cross-section of the population, particularly people who have careers in the building trades," Patton said. She also included contractors, Realtors and "anybody who works on commission sales."

"Those people no longer have the paychecks that created their lifestyle to be able to afford a mortgage and car payment," she said.