October 13, 2009

The canary died: bankruptcy filings up

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The economic fallout continues to worsen for those struggling under the double whammy of crippling debt and job loss. Bankruptcy filings are surging across the country. In Utah, Steven Oberbeck of the Salt Lake Tribune reports filings were up a “staggering 62 percent” compared with the same period a year ago. Nationally, more than 1 million people have filed for bankruptcy protection, the most since 2005.

In addition to usual bankruptcy drivers – including high consumer debt, or unpaid medical bills, bankruptcy courts are also hearing from individuals who had personally guaranteed loans to businesses, which then soured.

In the realm of economic indicators, bankruptcy filings aren’t in the “canary in the coalmine” category. They’re more like the rescue workers who come in after the mine’s collapsed to see what’s salvageable – a trend worth watching.

Carol Smith

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