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Last updated 12:31PM ET
February 17, 2012
KBIA Local
KBIA Local
Attorney Predicts High Number of Bankruptcies May Be Leveling Off
Garrett Bergquist (2010-02-08)
COLUMBIA, MO (KBIA) - Anchor Intro: Personal bankruptcy filings have risen across the state in the last three years, but a Columbia bankruptcy attorney says this trend may be slowing down. Dianna Coy Long is an attorney with the Mid-Missouri Bankruptcy center. She says personal bankruptcy filings spiked in 2009, but she adds the bankruptcy rate in 2010 will not be worse than last year unless there is another economic collapse. Jefferson City bankruptcy attorney John Reed expresses some doubt that filings may level off. He concedes there are fewer bankruptcies on the docket for the month of February than he has seen in a while. Reed says he thinks this year's bankruptcy rate will be about the same as last year.

"Certainly my bankruptcy docket in February is lower than it has been for a while, but I think that it will pick up with the income tax season."

Reed says he is increasingly seeing people filing for bankruptcy who come from higher levels of income.

"I think that might be a trend that it's affecting people who have earned a little bit more money in the past, and either because they have lost a job or they have incurred too much credit card debt and they just can't keep up with it anymore and now they're having to file."

There are two types of bankruptcy filings: Chapter 7 and Chapter 13. Chapter 7 filings accounted for more than 80% of bankruptcy filings in Mid-Missouri between 1997 and 2009. In this type of filing, some property may be sold to help pay off the debt. Chapter 13 filings involve a repayment plan, typically lasting three to five years. Dianna Coy Long says the three main causes of bankruptcy filings are credit card debt, medical debt and unemployment. She says there is a direct correlation between economic stability and bankruptcy filings. She says she believes those who will be hit hardest by the recession have already filed for bankruptcy. © Copyright 2012, KBIA