Bankruptcy filings in Nevada up 13.6 percent in April


Nevadans seeking good news about the economy should not look at the latest numbers from the state's bankruptcy court.

Filings increased 13.6 percent in April to 2,846 from 2,505 for the same time last year, according to recent data released by the U.S. Bankruptcy Court of Nevada.

Local bankruptcy officials say they are seeing an increase in filings from middle-class workers who have jobs but are experiencing pay cuts.

Brian Shapiro, a court trustee and attorney, said more government and Clark County School District employees are filing for bankruptcies as local governments are sharply cutting budgets and workers' pay.

"They all got a cut in pay," said Shapiro, who oversees about 200 cases a month. "I think we may see this during the next couple years. I'm sure they got stuck in the same house issues with the mortgages."

But the downturn has not only affected government employees. More professionals like doctors, attorneys and accountants are filing, Shapiro said.

Local bankruptcy attorney Nancy Allf said she also is seeing more middle-class people filing than in the past.

"It's well-educated people with good jobs who thought they were financially prudent," said Allf, who has practiced in Las Vegas since 1983. "They can't keep their homes, they've accumulated too much debt. All they were doing was living the American dream. It's so sad."

Chapter 7 liquidations accounted for the bulk of the filings in April, with 2,172 statewide. That is an 18.8 percent increase from April 2009.

Chapter 7 cases are filed by individuals and businesses.

Chapter 11 bankruptcies increased 45.2 percent in April to 45 from 31 filings.

Prominent Chapter 11 filings this year include the Las Vegas Monorail, Mesquite gaming operator Black Gaming, and the holding company that had planned to build an Elvis-themed resort on 18 acres across from CityCenter on the Strip.

Chapter 13 cases, which require court-ordered repayments for as long as five years, decreased 2.5 percent. There were 629 Chapter 13 filings in April compared to 645 in the prior year.

The bankruptcy court's Southern Division in Las Vegas received 2,360 filings in April.

The economy could also be causing an increase in people trying to represent themselves in the courts.

The number of pro se bankruptcy filings, where individuals use legal aides instead of attorneys to file, increased to 301 in March and April, up from 165 in March and April 2009, Shapiro said.

Shapiro cautioned that self filings can "end up floundering within the bankruptcy proceeding" if the individuals don't get proper legal advice.

For the year, statewide filings are up 17 percent to 9,690 from 8,285 filings through April.

The state had 29,170 filings last year, 22.3 percent more than in 2005, the year the Bankruptcy Abuse Prevention and Consumer Protection Act took effect. The state continues to lead the nation in individuals filing bankruptcy, with 10.32 filings per 1,000 people, according to Automated Access to Court Electronic Records.

Contact reporter Arnold M. Knightly at aknightly @reviewjournal.com or 702-477-3893.

BANKRUPTCY FILINGS

  Chapter 7 Chapter 11 Chapter 13 Total
April 2009 1,829 31 645 2,505
April 2010 2,172 45 629 2,846
 

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