Losing your job. Opening the day’s mail and seeing a big, unexpected medical bill you can’t pay for. Never feeling like those credit cards will ever get under control.
These are just a few of the reasons why people in Dayton file for bankruptcy every year. Ohioans are great, hardworking people, but our state is still ranked among the top 10 for the highest percentage of bankruptcy filings — about 322 per 100,000 people. We took a big hit during the Great Recession.
While the amount of bankruptcy cases filed in Ohio, and Dayton, has been on the decline in recent years, mirroring national trends since the height of the economic collapse, there are thousands here locally who still need help with managing their debt every year.
Here’s how bankruptcy cases stacked up in 2016, and where you can turn for advice should you choose to file bankruptcy.
Breaking Down the Numbers
In 2016, the United States Bankruptcy Court Southern District Ohio recorded 4,105 new bankruptcy filings in its Dayton office. Of that, 69 percent were Chapter 7 (2,831) and 31 percent were Chapter 13 (1,273). Just one Chapter 11 bankruptcy was filed the entire year, and no Chapter 12.
Ninety-seven reopened cases were included in the grand total of Dayton bankruptcy cases for 2016. There were 115 adversary proceedings filed last year. An adversary proceeding (AP) is a lawsuit filed separately from a bankruptcy case, though related, and resembles a typical civil case as found in Rule 7001 of the Federal Rules of Bankruptcy Procedure. Rule 7001 governs adversary proceedings, which include those to determine the dischargeability of debt, revoke an order of confirmation of a Chapter 11, Chapter 12 or Chapter 13 plan, and more.
The busiest month for bankruptcy filings in Dayton was March for total cases (417) as well as Chapter 7 filings (312), though July was the busiest month for just Chapter 13 (139).
On Trend with National Statistics
The Dayton office accounts for 24.4 percent of total bankruptcy cases in the Southern District of Ohio, which also includes Columbus and Cincinnati, with its percentage of Chapter 7 and 13 bankruptcy filings lining up with the average across all offices. More than 17,000 bankruptcy filings took place in the entire district in 2016.
Nationally, of the top 15 bankruptcy courts, the Southern District Ohio ranks 9th in total filings. The Northern District Illinois ranked 1st, with 44,937 total filings.
Districtwide, bankruptcy filings have decreased every year the past five years, generally by between 1,000 to 3,000 fewer cases each year. The decline has slowed, just like it has nationally.
Fewer than 800,000 people filed for bankruptcy in federal courts last year across the U.S. Compared to the 1.6 million bankruptcy filings nationally in September 2010, that’s a big drop in six years.
While the amount of U.S. bankruptcy filings in 2016 was the lowest out of any calendar year since 2006, the decrease in cases is slowing down. 2016 was the first calendar year since 2011 that the percent decrease no longer was double-digit.
A Look Ahead — Is Bankruptcy Right for You?
Despite the overall trend of bankruptcy on the decline, so far, for January 2017, the amount of bankruptcy filings in Dayton are up compared to January 2016. Eighty-one more cases were filed last month compared to the same month a year prior.
Chapter 7 is the clear front-runner in both national cases and locally. To figure out if you should file Chapter 7 or 13, Ohio has some income guidelines to follow. Chapter 7 is basically a “liquidation” of your assets, while Chapter 13 puts you on a repayment plan to your creditors. If you can pay back your creditors, typically Chapter 7 isn’t right for you.
You also want to make sure you’re always filing in good faith, or you could be looking at the court dismissing your case. Eliminate lavish spendings, and work on tightening your wallet. A luxury lifestyle in the midst of a bankruptcy proceeding isn’t going to look good to a judge.
We have some great budget basics that we’ve researched, such as splitting your expenses into categories like rent/mortgage, groceries, credit card payments, with some left over for savings and entertainment. Getting back on track does take time, though, so don’t be dismayed.
If you are struggling with the idea of filing for bankruptcy, we can help. We’ve successfully managed hundreds of bankruptcy cases, and can determine if bankruptcy is right for you. Our expertise includes bankruptcy, bankruptcy protection, bankruptcy and foreclosure, Chapter 7, Chapter 13, and unsecured and secured debt.
Contact us today for a free case review.