Bankruptcy filings continued to fall in 2013

By Kristi Pihl, Tri-City HeraldJanuary 12, 2014 

Tri-City bankruptcy filings continued to decline in 2013, continuing a four-year trend.

The total number of bankruptcy cases filed in Benton and Franklin counties last year was 749, down about 6 percent from 2012, according to data from the Eastern Washington U.S. Bankruptcy Court.

Benton County saw bankruptcies fall to 494 filings last year, a drop of more than 9 percent, according to the data. Franklin County had 255 filings last year, one more case than in 2012.

Franklin County's increase was due to more Chapter 13 bankruptcies, where someone repays a portion of their creditors. There were 48 Chapter 13 filings last year in Franklin County, up about 55 percent from 2012.

In Benton County, there were 64 Chapter 13 bankruptcy cases filed in 2013, down about 25 percent from the previous year.

Medical bills remain an underlying cause for many of the bankruptcy cases, said Pasco bankruptcy attorney Greg Beeler. Medical insurance doesn't cover everything, and he doesn't see any reason to think the trend in medical expenses will not continue.

Under a Chapter 13, someone can make a plan that will help them catch up with delinquent payments over a period of time that, if approved by the court, their mortgage company and other creditors will have to accept, Beeler said.

In the Tri-Cities, Chapter 7 bankruptcies, the most common kind, dropped to 636 cases, down by about 7 percent from 2012.

In every Chapter 7 case, a trustee is appointed who has the authority to sell property if it is more than what the person filing bankruptcy is allowed to keep, Beeler said. In most cases the trustee can't sell what people own, since a primary residence up to $120,000 in value is exempt.

If someone has too much income or wants to catch up on mortgage payments, people will file a Chapter 13 bankruptcy, Beeler said.

For some, filing bankruptcy can help get rid of dischargable debts such as medical and credit card bills, which allows them to focus on paying bills that can't be forgiven, including back child support, back taxes and student loans, he said.

Beeler said filing bankruptcy tends to work like his clients want it to. A bankruptcy court will discharge someone's debt unless someone objects and a judge decides to deny it, he said. Cases where a discharge of debts is not granted are rare.

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