A recent article in The Arizona Republic reports that August bankruptcy filings in Arizona increased 65 percent from 2006 filings. Arizonans filed 1021 bankruptcy applications in August, 2007 up from 617 in August 2006. Bankruptcy filings are also increasing nationwide, up 31 percent from August 2006.
Although the article doesn’t get into the specifics of why such a large increase in Arizona bankruptcy filings was seen, I believe it can be largely attributed to the rapid increase in foreclosures seen in Arizona.
According to data compiled by RealtyTrac , foreclosures in Arizona nearly tripled in July from 2006 – the eight largest increase nationwide, putting Arizona into the top 10 states for foreclosures.
I expect that a large number of the Chapter 13 bankruptcies filed where individuals attempting to save their homes from foreclosure by getting the protection of the automatic stay. Filing a Chapter 13 bankruptcy is a viable option that can order a mortgage company to stop the sale of your property and give you up to 3 years to repay any arrearage.
As foreclosures continue to rise in Arizona and many states, I expect it will cause a similar increase in Chapter 13 bankruptcy filings.