Indiana continues to see highest bankruptcy filing rates

MUNSTER, Ind. -- Northern Indiana residents have been filing bankruptcies at a faster rate than last year -- when the area had the highest Chapter 7 bankruptcy rate in the country.\nThe most recent records from federal courts show that those living in the Northern District of Indiana, which covers roughly the state's northern one-third, filed for Chapter 7 bankruptcy protection at a rate of 6.7 per 1,000 residents during the 12 months ending in June.\nThe court district covering the rest of the state was second with a figure of 6.6 compared with a national median of 3.8, The Times reported in a story Sunday.\nThose two districts in 2001 had the nation's highest filing rates for Chapter 7, the most common type of bankruptcy for people seeking protection from creditors.\nAnd northern Indiana seems in no danger of losing its dubious distinction, with a 20.1 percent increase in personal bankruptcies during this year's April-June period, according to the American Bankruptcy Institute.\nPamela Stallings, executive director of Consumer Credit Counseling Services in Gary, said her office has been busy organizing debt repayments. However, 81 people dropped out of the program last month.\n"That is a direct indicator that the economy is bad, because people who are in here are not sticking to the program, and it's because they can't," Stallings said.\nIndiana's high rate of bankruptcies comes even as the state continues to have a lower unemployment rate than the national average. The state unemployment rate in August was 5.2 percent, compared to 5.7 percent nationally.\nThe loss of jobs in steel and related industries, combined with the national recession, has contributed to the large number of bankruptcies in northern Indiana, said Joe Gomeztagle, associate director of the Indiana Business Research Center at Indiana University Northwest in Gary.\nHe said the loss of good-paying manufacturing jobs that disappeared years ago also was being felt as residents had to turn to lower-paying positions.\nThat legacy has become one more factor hurting the area's economy, even as the nationwide recession ends, he said.\n"Nationwide, it will take a while to come up," Gomeztagle said. "And in the state of Indiana it will take longer. And in Lake County it will take a lot longer to come up. The nation caught a cold, and our region got congestive heart failure"