Personal bankruptcy filings soar  

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Nathan Hurst / The Detroit News

DETROIT -- The number of southeast Michiganians declaring bankruptcy is skyrocketing.

Through October, the number of Chapter 7 personal bankruptcies filed in Detroit's federal bankruptcy court jumped 63 percent compared with the first 10 months of last year. With two months of 2007 filings still to be reported, there already are 4,700 more Chapter 7 filings this year than for all of 2006.

Financial experts say the reasons for the recent ramp-up in bankruptcy filings are well-known to many Michiganians.

"It's definitely about the bad economy and housing market," said Natasha Swoish, manager of bankruptcy counseling and education services at GreenPath Inc., a Farmington Hills-based credit counseling service. "Especially from the Detroit area, we're seeing a lot of people coming in because of foreclosure. It's a last-ditch effort to try and save their homes."

Swoish said GreenPath's counselors work with those in debt to set up plans with creditors, rather than defaulting or seeking bankruptcy protection. But lately, she said, that option of last resort has become necessary for those out of work and swimming in debt.

According to court records, 19,345 individuals or married couples filed for Chapter 7 bankruptcy through October, the latest month of data available from the Eastern District of Michigan bankruptcy court, which covers Detroit, Flint, Saginaw and Bay City. That compares with 14,650 for all of last year.

The number of Chapter 13 filings, which allow consumers to reorganize their debt through a court-managed payment plan, stood at 9,902 through October, compared with 8,344 through October of last year.

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