Georgia families struggle with personal bankruptcies « jeff ...

by Jeff

The Atlanta Journal-Constitution

One in 50 Georgia households declared bankruptcy in 2009 between January and November, leaving the state with the third-highest personal bankruptcy rate in the nation.

Georgia’s crowded federal bankruptcy courts handled 66,925 filings during the first 11 months of the year, a 22 percent increase over the same period in 2008, according to statistics compiled by the National Bankruptcy Research Center.

Only Nevada and Tennessee posted higher rates of personal bankruptcy, according to the center. Personal bankruptcy filings nationwide hit nearly 1.3 million between January and November, up 32 percent over last year.

High unemployment, the decimated real estate market and a slate of creditor-friendly laws fueled the bankruptcy numbers in Georgia, experts said.

Georgia’s numbers are up, but its position near the top of the bankruptcy charts is nothing new. The state has had one of the highest bankruptcy rates in the nation for years.

What’s changed for 2009 are the profiles of those filing, with the ranks these days including plenty of people for whom financial instability is a new experience.

Richard Thomson, a partner at Clark & Washington, a high-volume Atlanta bankruptcy law firm, said early in the economic downturn his firm took on lots of realtors and contractors as clients.

“Now other professionals, we’re seeing them come in more and more,” he said. “They are higher income and have a lot more assets, a lot more items like boats and motorcycles and four-wheelers.”

They simply can’t pay for what they have, Thomson said. “They’re just saying ‘Take it. It’s not worth the effort anymore. I can’t keep up with it.’ ”

Consumers in financial trouble don’t have the opportunities of the past to stay afloat: New jobs or second jobs to help pay down debt are hard to find, and home equity credit lines and credit card limits have been cut.

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