Nevada bankruptcy filings dropped sharply in a month, falling 20.4 percent in January to 1,825 filings, according to numbers released by the U.S. Bankruptcy Court of Nevada.
That compares to 2,294 filings in December, although court officials noted that January is traditionally the slowest month of the year for bankruptcy filings.
And the 1,825 filings in January were 14.4 percent higher than the 1,596 filings in January 2009, suggesting state businesses and residents may be looking at another year of financial struggles.
Greg Garman, managing partner focusing at the law firm of Gordon Silver, said one month of numbers is not enough to tell how 2010 will compare to the 2009, when a record number of bankruptcies were filed.
"The bankruptcy courts are busier than they've ever been," Garman said. "The dockets are full and the judges are hearing, literally, thousands of cases a week. I think you can read from it that there still is a record pace of people filing for bankruptcy."
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. Nevada led the nation in 2009 in individuals filing bankruptcy, with 11.2 filings per 1,000 people.
Tisha Black-Chernine, founding partner of the law firm Black & LoBello, said bankruptcies could top last year's number unless banks become more responsive in assisting businesses and individuals.
"Most people want to work their debt problems out without having to file bankruptcy," Black-Chernine said. "Negotiation, however, is a near impossibility as the banks are either uncooperative or nonresponsive. The return to being productive -- as soon as possible -- is the goal. The threat of a collector looming for years is not an option. For a number of debtors, be it credit cards, deficiencies or negative equity, the only manner in which they can cauterize their situation in short order is to file a bankruptcy."
Chapter 7 liquidations accounted for the bulk of the filings in January, with 1,290 statewide. That is a 25.7 percent drop from December but a 16.6 percent increase from January 2009.
Chapter 7 cases are filed by individuals, married couples and businesses.
Chapter 13 cases, which require court ordered repayments under plans as long as five years, were down to 508 in January from 528 in December. There were 465 filed in January 2009.
Chapter 11 bankruptcies decreased slightly in January from December, falling to 27 from 30. There were 25 filings in January 2009.
The Southern Division of the court in Las Vegas received 1,541 filings in January.
Nancy Rapoport, a bankruptcy law professor at the University of Nevada, Las Vegas, said bankruptcy filing numbers are traditionally "quirky" after the holidays.
"Perhaps people were distracted in December by the holidays and didn't file and are filing now because credit cards are coming due," she said. "But it's really hard to tell because the data sets before the recession just don't predict what is happening now."
Robert Lawless, a bankruptcy law professor at the University of Illinois, said February and March filings will offer clues about whether bankruptcy filings will continue to increase in Nevada and the nation for the rest of the year.
"February and March are going to be very important in determining where we're going for the rest of the year," Lawless said.
Nationally, bankruptcies reached 1.4 million, well below the all-time high of approximately 2 million in 2005.
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3893.