By ideastream's Brian Bull
Bankruptcy filings for northern Ohio are at a 10-year low, and 2015 seems to be stretching that trend…at least for now.
More than 22,000 bankruptcy cases were filed last year, across a 40-county region. That’s down 9 percent from 2013, and the lowest number of total filings recorded for the past decade.
But Pat Morgenstern-Clarren says it’s all cyclical. She’s Chief Justice of the U.S. Bankruptcy Court for the Northern District of Ohio.
“Bankruptcy filings generally go up for about 5 or 6 years, and then they go down for about 5 or 6 years. And then they repeat the cycle," she says. "It looks like as this cycle of “down” may be a little bit longer.”
Ohio bankruptcy attorney Kenneth Richards says those still filing include retirees – who either have hit hard times or are trying to help their children -- and millennials, who are struggling with student debt or low wages. He suspects bankruptcy filings may ease up in coming years, with the recent rollout of the Affordable Care Act.
"Before the Act…60-70 percent of bankruptcy filings were featuring some type of medical bills," says Richards. "And for people that are on the edge, even a $1000 or $2500 medical bill could send them careening into a financial abyss.”
Richards adds that a bankruptcy filing can affect a person’s credit record from 7 to 10 years.
In spite of the ten year low in area bankruptcy filings, the Northern District of Ohio currently ranks eighth out of 94 districts in the nation, with Cleveland and Toledo having the most bankruptcy filings.