Oct. Bankruptcy Filings Near All-Time High

The wave of personal bankruptcy filings by Californians showed no signs of slowing in October, according to CDB Infotek, a public records information service.

A total of 18,420 filings, close to the all-time record, was recorded at the 13 Bankruptcy Court branches in California in October. That is up 9.1% from the 16,891 for September and up 7.1% from the 17,206 for October of last year, according to CDB Infotek.

The October figure is just shy of the all-time peak of 18,552 bankruptcy filings, recorded for April.

It appears so far that 1997 is on track to be a record year for personal bankruptcies, CDB Infotek said. The service attributed the trend to rising debt loads and a lessening of the disgrace associated with a personal bankruptcy.

“It’s clear that California’s current economic growth isn’t reaching everyone and that there’s still financial distress out there,” said Rick Rozar, CDB chief executive. “More people are choosing bankruptcy in circumstances they wouldn’t have a few years ago. Much of the stigma seems to be gone.”

The group tracks the number of filings made each month under Chapters 7 and 13 of the nation’s Bankruptcy Code, the vast majority of which are made by individuals or couples. In a Chapter 13 filing, the debtor seeks a repayment plan; in a Chapter 7, assets will be liquidated.

The trend in California mirrors that of the nation as a whole this year. In fact, in the third quarter, the number of people filing bankruptcy nationwide increased 9.7% from the same quarter last year.

Some parts of California are experiencing more of the rapid rise in bankruptcies than in other areas. In fact, residents of Riverside and San Bernardino counties are most likely to file for bankruptcy and those in Marin County are least likely, this year’s data show. In the Bay Area during October, bankruptcies were down 7.4% from a year ago, but in Southern California they rose 11.8%.