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Bankruptcies across Washington state grew in October, driven partly by steep increases in filings in King and Snohomish counties, but the pace of new filings could be slowing.
There were 2,950 bankruptcies filed last month, a 29 percent gain over October 2008. The year-over-year growth rate was 33 percent in September and 51 percent in August.
The state’s most populous counties posted large increases in bankruptcy filings last month compared with October 2008: There were 678 bankruptcies in King County, a 33 percent increase; 369 in Snohomish County, up 55 percent; and 447 in Pierce County, up 28 percent.
Washington ranked 23rd among the states in October’s per capita filings, according to AACER, a bankruptcy-data and management firm. The state ranked 10th in the year-over-year increase in per capita filings.
Seventy-nine businesses in Western Washington filed for bankruptcy in October, up from 55 a year ago. So far this year, 751 businesses have declared bankruptcy in Western Washington, compared with 415 for the same period last year.
Overall, there have been 26,372 bankruptcies filed this year in Washington state, up 46 percent over the same period last year. Experts say the tightening of consumer credit and home equity lending over the past year left many families with no other option.
The level of bankruptcy filings may be returning to normal historical levels, says Robert Lawless, a bankruptcy law professor at the University of Illinois.
During the ’90s, about 24,000 bankruptcies were filed each year in Washington state, according to data from the American Bankruptcy Institute. From 2000 to 2004, an average 37,000 bankruptcies were filed annually. Filings peaked at 46,930 in 2005.
Starting in 2006, when a stricter federal bankruptcy law took effect, the rate nose-dived to 11,911 filings and stayed artificially low for years, Lawless said. There were 15,568 filings in 2007 and 21,835 filings in 2008, according to the institute.
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