Copyright 2002 The Denver Post Corporation
The
Denver Post
May 17, 2002 Friday 1ST EDITION
Correction Appended
SECTION: BUSINESS;
Pg. E-01
LENGTH: 534 words
HEADLINE: U.S. bankruptcies soar; Colorado faring
better
BYLINE: By Tom McGhee, Denver Post Business
Writer,
BODY:
Bankruptcy filings nationally have
shattered a record for the second time in two years, a new report
says, but the bankruptcy picture in Colorado continues to be slightly
brighter.
Filings rose 15.1 percent in the 12-month period ended
March 31, over the previous 12 months, according to the
Administrative Office of the U.S. Courts.
Lawyers and other
members of the American Bankruptcy Institute expect the number of
filings in the current 12-month period to soar past the 1.504 million
filed in the period ended March 31, said Samuel Gerdano, executive
director. The previous record for a 12-month stretch was 1.492
million in the year that ended Dec. 31, 2001.
In the first
quarter of 2002, filings rose 3.3 percent - to 379,012 from 366,841 -
over the same period last year, making it the highest number ever for
a first quarter, according to the bankruptcy institute.
Colorado has so far managed to buck the national trend.
The state finished 2001 with 18,206 filings, higher than the
previous year but still lower than the 19,075 record set in 1997,
according to numbers reported in February.
The rapid
escalation of new filings nationally will increase calls for federal
legislation making it harder for consumers to declare bankruptcy to
escape debt, Gerdano said.
With the economy apparently on the rebound,
lawmakers are once more debating a proposal that would make it harder
to file Chapter 7, which erases credit-card and other debts.
The staggering economy made the bill's future dicey.
The bill
is supported by banks and credit-card companies.
'As the economy became
brighter and the recession became a recessionette, the bill did rear
its head,' Gerdano said.
The legislation has strong congressional
support. But it is stalled by a controversial provision that would
bar abortion opponents from declaring
bankruptcy to avoid paying court-imposed fines or
damages that result from violent protests at
abortion clinics.
The majority of consumer
bankruptcy filings continues to be under Chapter 7,
according to the bankruptcy institute.
The pending legislation would
ultimately reduce the number of bankruptcies filed, Gerdano said. But
in the short-term, it will push filings higher as consumers rush to
take advantage of the existing law.
Consumer debt is at
record levels, with an average credit-card debt of $ 8,367 for
households that had at least one credit card in 2001, according to
CardWeb.com, which tracks the credit-card industry.
The high
debt burden makes it more likely that a sagging economy and growing
unemployment will push more people to seek bankruptcy protection.
Individuals who lose their jobs during a downturn
usually wait until they have exhausted savings before declaring
bankruptcy - a move that can damage their credit ratings.
Just this week in Denver, concert promoter Barry Fey
filed for Chapter 7 protection; in another case, some creditors
of Larsen Homes filed a petition to force the homebuilder and
its chief executive, Larry Larsen, into bankruptcy.
Larsen
shuttered the business in mid-March.
CORRECTION-DATE:
May 19, 2002
CORRECTION:
An article in Friday's
Business section misstated the bankruptcy chapter under which Barry Fey filed
for protection. Fey filed Chapter 11.
LOAD-DATE: May
21, 2002 
