Attorneys who specialize in bankruptcy cases warned that the economy remains volatile, and filings could spike again unless more people find jobs amid what looks to be an uneven recovery.
"It's still joblessness that's driving people into bankruptcy and once the jobs start coming back people would want to reorganize their debts and hang onto their assets," said attorney Edgar Rothschild of the Rothschild & Ausbrooks law firm in Nashville.
Consumer and business filings declined last year, according to data released Wednesday by the U.S. Bankruptcy Court for Middle Tennessee.RelatedNashville courts struggle to collect fees, finesInvestors profit from housing slumpCoverage: Tips, resources and information on finding employment
Locally, 14,063 cases were filed here last year 875 fewer than in 2009, court records show. Of those, consumers filed 13,845, while businesses accounted for roughly 430 cases. Chapter 11 cases in which businesses craft a plan of reorganization, pay some debts and continue operating were about flat year over year.
A recent national snapshot of bankruptcy filings showed fewer cases late last year.
Filings collected from the nation's 90 bankruptcy districts showed 113,000 bankruptcies in December, down 3 percent nationwide from the same month a year ago. That followed a similar year-over-year decline for October. It had been four years since an individual month showed such an improvement.
At the law firm Mayer & Newton in Knoxville, partner John Newton said the Tennessee economy, while still challenging, appears to be more stable than other parts of the country. And he said many of the people who need relief from their debts have already gone through the bankruptcy process.
"I think we've sort of turned the corner," he said.
Bankruptcy filings have had a volatile decade, with a surge to record highs in 2005 as filers rushed to make their claims before Congress overhauled the system. Lawmakers made bankruptcy filings more cumbersome and, as a result, more costly amid concerns that some consumers were taking advantage of the old system to escape debts.(2 of 2)
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