VOL. 128 | NO. 77 | Friday, April 19, 2013
Bankruptcies Dip Slightly as Economy Improves
By Jennifer Johnson Backer
The first quarter of 2013 showed a slight slump in West Tennessee bankruptcy filings as the economy improved.
All chapters combined – Chapters 7, 11 and 13 – declined to 3,031 Shelby County bankruptcies for the three-month period ended March 31, down 1 percent from 3,063 bankruptcies filed during the same three-month period in 2012, according to The Daily News Online, www.memphisdailynews.com.
The U.S. Bankruptcy Court, Western District of Tennessee, has offices in Memphis and Jackson. However, the data in this report include only ZIP codes within Shelby County. The data measures the number of bankruptcies filed by Shelby County debtors in local bankruptcy court.
Darrell Castle, a bankruptcy attorney with Darrell Castle and Associates PLLC in Memphis, said a rising number of homeowners who can’t make their monthly mortgage payments are forcing more people into Chapter 7 bankruptcies, and driving down the number of Chapter 13 filings. Castle said Chapter 13 filers need to demonstrate they have adequate income to pay back creditors.
“The economy in general is hurting Chapter 13 figures and boosting Chapter 7 filings,” he said.
Under a Chapter 13 bankruptcy, debtors agree to pay back their creditors over a set period of time with court approval. In many Chapter 13 cases, debtors are able to keep their property. Chapter 7 bankruptcy filers who are not current on their mortgages may have a more difficult time keeping their homes. Chapter 7 bankruptcies are typically filed by the most hard-pressed debtors and wipe away most of what they owe.
Chapter 13 bankruptcies fell to 2,161 in the quarter, down 2.5 percent from 2,216 in Q1 2012.
Frayser’s 38127 ZIP code led Chapter 13 filings with 235 in the quarter, up 19.3 percent from 197 in Q1 2012. Frayser’s 235 filings were followed by Westwood’s 38109 ZIP with 183 filings, down 4.2 percent from 191 a year earlier. Other areas with high Chapter 13 filings include: Oakhaven/Parkway Village’s 38118 with 170, Raleigh’s 38128 with 159, and Whitehaven’s 38116 with 144.
While overall bankruptcies fell, the 855 Chapter 7 bankruptcies in the first quarter represented a 2 percent rise from the 838 filings in Q1 2012.
Raleigh’s 38128 saw the most Q1 Chapter 7 filings with 65, followed by Westwood’s 38109 with 62, Hickory Hill North’s 38115 with 61, Frayser’s 38127 with 51, and Cordova North’s 38016 and Oakhaven/Parkway Village’s 38118, each with 46.
Chapter 11 bankruptcies, or business reorganization filings, also gained to 15 in Q1, up 66.7 percent, from 9 filings in Q1 2012.
Six of those filings were in River Oaks’ 38120, four were in Rhodes College’s 38112, Whitehaven’s 38116 and Collierville’s 38017, each with two, and Oakhaven/Parkway Village’s 38118 had one.