Bankruptcy filings have skyrocketed over the past year, both nationwide and in the D.C. region.
Experts say the still-troubled economy is the chief contributor to the increase in bankruptcies, as people who used up other financial resources earlier in the recession now have no other option.
The District, though, had one of the lowest per capita filing rates in the country for the 12-month period that ended June 30. But bankruptcies still jumped here compared with the previous year.
Nationwide, bankruptcy filings rose 20 percent for that time period, according to statistics released Tuesday by the Administrative Office of the U.S. Courts.
Filings jumped 26 percent in D.C., 36 percent in Maryland and 15.4 percent in the Eastern District of Virginia.
Bankruptcy lawyer Stefan Coleman said people have tapped out their savings, stocks and 401(k) plans for funds over the past two years.
“People have nothing left,” he said.
Rising foreclosures — especially in Maryland — are another key factor, bankruptcy lawyer Harris Ammerman said.
“There are more foreclosures and more auctions, which translates into people seeking relief in the bankruptcy law,” Ammerman said.
Still, D.C. is faring better than many other places. The per capita filing rate in the District for the year that ended in June was 2.1 filings per 1,000 people, the 51st-lowest among 55 states and territories.
Nationwide, the rate was 5.05 filings per 1,000 people. Maryland’s rate was 5.11 per 1,000, and Virginia’s was 4.79 per 1,000.
Coleman, who also practices in Florida, New Jersey and New York, said he gets the fewest calls from D.C. by far.
“It’s a government area, and most people have jobs,” he said.
A total of 1,572,597 bankruptcies were filed nationwide from July 1, 2009, to June 30, 2010.
That number is the highest since 2005, when the bankruptcy code changed.
Locally, 1,257 were filed in D.C., 29,105 in Maryland and 28,376 in the Eastern District of Virginia.
And rising bankruptcy filings aren’t likely to end anytime soon.
In a statement, Samuel Gerdano, executive director of the American Bankruptcy Institute, noted that filings are on track to surpass 1.6 million for the 2010 calendar year.
“When the economy improves and people are employed, the numbers will improve,” Ammerman said. “It’s a slow process.”
