Bankruptcy filings hold steady for 2015

The number of people unable to pay their bills and choosing to file for bankruptcy remained steady for central Indiana in 2015, though Johnson County residents are faring better than they have in nearly a decade.

More than 7,600 people filed for bankruptcy in central Indiana in the first 11 months of 2015, according to data from the U.S. District Court Southern District of Indiana.

Local bankruptcy attorneys said they expected the number of residents filing for bankruptcy to continue at a similar rate, despite a dip in unemployment and an improving economy. In 2014, nearly 9,000 people in central Indiana filed for bankruptcy.

More than 600 Johnson County residents filed for bankruptcy in 2015 as of Dec. 1, compared with 686 in all of 2014. With new filings in December unaccounted for, the 2015 rate was the lowest number of filings in the county since 2007, according to the Southern District of Indiana.

Just because more people are employed does not mean they can pay their bills, said Matthew Schoettmer, an associate attorney for Van Valer Law Firm in Greenwood. More people are employed but not necessarily full time or at the same pay scale from a few years ago, he said.

For example, if a resident used to make $60,000 annually but got laid off and found a job that pays $30,000 a year, that person still would have trouble supporting the former lifestyle, Schoettmer said.

“Just because the economy is better overall doesn’t mean that there are a bunch of people that are better off than they were,” Schoettmer said.

Most of the filings last year were Chapter 7 bankruptcies, where credit card or medical bill debt is wiped away, and the process typically takes less than six months. If filers make too much money annually or if they are trying to avoid losing their home, they would file for a Chapter 13 bankruptcy, which requires filers to make payments for three to five years before being out of debt.

The most common reasons people file for bankruptcy are divorce, high medical bills and job loss, according to Indianapolis bankruptcy lawyer Ryan Scott Wright. He said he expects the number of bankruptcies to stay high or even rise this year.

With so many people employed, collection agencies have a bigger pool of residents to take back the money owed to them for overdue mortgages or unpaid electric bills, he said.

“If you’re a bad collection target, then you’re not high on the totem pole,” Wright said.

When residents are jobless, they are not a high priority for collection agencies since they can’t pay back the money they owe, Wright said. Once those people become employed again, collection agencies will try collect the money owed to them, he said.

“If they’ve lost their job, there’s nothing to garnish,” Indianapolis lawyer James M. Lieb said. “So there’s no reason to declare bankruptcy.”

By the numbers

Here’s a look at the number of bankruptcies filed in central Indiana from the past five years:

Johnson County

2015: 604 bankruptcy filings total (as of Dec. 1)

2014: 686

2013: 779

2012: 893

2011: 974

Boone County

2015: 137 bankruptcies (as of Dec. 1)

2014: 189

2013: 211

2012: 265

2011: 291

Hamilton County

2015: 739 (as of Dec. 1)

2014: 899

2013: 965

2012: 1,299

2011: 1,293

Hancock County

2015: 254 (as of Dec. 1)

2014: 328

2013: 350

2012: 410

2011: 464

Hendricks County

2015: 522 (as of Dec. 1)

2014: 574

2013: 714

2012: 762

2011: 773

Madison County

2015: 668 (as of Dec. 1)

2014: 752

2013: 888

2012: 985

2011: 965

Marion County

2015: 4,223 (as of Dec. 1)

2014: 4,796

2013: 5,228

2012: 6,005

2011: 6,398

Morgan County

2015: 300 (as of Dec. 1)

2014: 315

2013: 323

2012: 414

2011: 426

Shelby County

2015: 160 (as of Dec. 1)

2014: 228

2013: 200

2012: 263

2011: 294

Source: U.S. District Court Southern District of Indiana