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Nevada bankruptcy filings down slightly in May

Nevada bankruptcy filings decreased slightly in May as fewer people sought to repay their debt under Chapter 13 protection.

It is the first year-to-year decrease in filings since late 2006, according to state records.

Filings statewide decreased 1.8 percent to 2,561 from 2,609 for the same time last year, according to data released late Monday by the U.S. Bankruptcy Court of Nevada.

Chapter 13 filings, which require court-ordered repayments for as long as five years, dropped 20.7 percent to 582, down from 734 in May 2009.

Brian Shapiro, a court trustee and attorney, said the decrease could be due to fewer people trying to save their houses through bankruptcy.

“More people are qualifying to be in a Chapter 7 proceeding,” Shapiro said. “More people are deciding not to retain their houses, not attempting to save them from foreclosure.”

Filings for Chapter 7 liquidations and Chapter 11 cases were up slightly, but the increase was not as sharp as the increases seen in previous months.

Ryan Works, an associate with the law firm McDonald Carano Wilson, said there are probably fewer financially distressed businesses left to file bankruptcy.

“From the corporate standpoint, there’s a lot of companies who are already in or who have already come out of bankruptcy,” Works said. “That is the cyclical nature of bankruptcy.”

Chapter 7 liquidations by individuals and businesses accounted for the bulk of the filings in May, with 1,942 statewide. That was a 5.5 percent increase from May 2009. Chapter 7 filings were up 18.6 percent in April and 24.2 percent in March compared to the prior year’s months.

Las Vegas magician Steve Wyrick filed for Chapter 7 protection in May, listing $93,000 in assets against $54.4 million in debt.

Chapter 11 bankruptcies increased 8.8 percent in May after increasing 45.2 percent in April.

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.

Filings in the bankruptcy court’s Southern Division in Las Vegas were down 5.5 percent to 2,095 filings in May.

For the year, statewide filings are up 12.5 percent to 12,251 through May.

The state continues to lead the nation in filings per capita, followed by Georgia and Tennessee, according to Automated Access to Court Electronic Records.

Nevada 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.

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

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