by Russ Wiles - Aug. 7, 2008 12:00 AM
The Arizona Republic
Arizonans continue to struggle with mounting debts, a sluggish housing market and job losses, and those strains showed up in a bankruptcy surge in July.
Consumer bankruptcies in the Phoenix area more than doubled to 1,251 last month compared with July 2007.
Nearly four in five involved Chapter 7 filings, which offer a "fresh start" with the dismissal of most types of debt. Chapter 7 filings jumped 118 percent, compared with a 90 percent rise for Chapter 13 filings, which feature debt-repayment plans.
Total statewide filings doubled to 1,782 in July, with Chapter 7 bankruptcies accounting for the lion's share of those, too.
In June, there were 1,118 filings in the Valley and 1,577 in the state.
"The environment today is very stressful," said Jack Craven, president of Debt Settlement USA in Scottsdale. "There's a lot of pain out there."
Rather than a single catalyst, Craven said consumers are being hit from various sides at once, including weak real-estate prices, job losses, big medical bills, an inability to refinance home mortgages and rising prices for gasoline.
Bankruptcies are increasing at a faster pace in Arizona than nationally, where consumer filings in July rose 48 percent from a year earlier, the American Bankruptcy Institute and National Bankruptcy Research Center reported. The nation's July filing total of 94,124 represented a 14 percent increase from June.
Factors making the Arizona numbers worse include the weak housing market and relatively steep job losses. For example, Phoenix homes logged the third-worst average decline in May from April among 20 cities tracked by Standard & Poor's and Case-Shiller. Meanwhile, Arizona shed a net 17,000 jobs over the past year through May, ranking fifth-worst among the states.
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