Bankruptcies down since peak in 2009
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Bankruptcy filings in Bartholomew County in 2012 fell to a four-year low but remained significantly higher than before the recession.
Last year, 307 people or businesses filed for bankruptcy, four fewer than in 2011, according to data from the U.S. Bankruptcy Court of the Southern District of Indiana.
Fueled by the recession and resulting income declines from job losses, filings peaked in 2009, with nearly 400 in Bartholomew County and nearly 28,000 across the state.
After 2009, however, filings have declined nearly 23 percent, about in line with the state average. Decatur and Jackson counties have seen declines greater than 30 percent, and the number of bankruptcies in Jennings County has declined more than 42 percent since 2009.
In the past three years, the average annual decline in Bartholomew County was 8.1 percent.
“I’ve certainly seen a drop ... in the last two or three years,” said Columbus attorney Benjamin Loheide, who handles bankruptcies and other cases from his office at 421 Washington St.
He said his clients who file for bankruptcy typically deal with a catastrophic life change — divorce, job loss or medical problems — that significantly reduces their income or increases their expenses. Those types of situations can put people in a hole from which they cannot escape, he said.
Columbus attorney Thomas Bushhorn sees clients file for bankruptcy for the same kinds of reasons. Some clients do not even have the money to pay for a bankruptcy filing, which can cost $1,200 to $1,500, he said.
His clients approach him usually as a last resort, when they have gotten into such a hole that their wages are being garnisheed.
In many cases, clients are misinformed about when they can and should file for bankruptcy, Bushhorn said.
He said his office, at 1015 Third St., has not seen a decline in filings in the last three years, although that might be because he opened the office only three years ago after leaving a large firm in Indianapolis.
“I’m staying busy,” Bushhorn said. Bankruptcies account for about 90 percent of his business.
William C. Haeberle, a lecturer in business at IUPUC, said he suspects that current low-interest rates may be contributing to the lower number of bankruptcy filings.
With high interest rates, people struggle even more to pay off debt, because a big chunk of their income is consumed by interest expense, Haeberle said via email.
Despite the reduction in bankruptcy filings, however, the number of filings for most counties remain higher than before the recession. For example, Bartholomew County recorded 307 bankruptcy filings in 2012, compared to 226 in 2007.
Some of that difference likely is because of population growth, said Michael Oakes, MBA director and senior lecturer in finance at IUPUC.
The county’s labor force increased by more than 3,000 people, or nearly 8 percent, from 2009 to 2012, according to the Bureau of Labor Statistics.
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