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Ohio bankruptcy filings drop in 2011

Despite significant struggles with the economy last year, data shows that fewer Ohio residents sought debt relief under the nation's bankruptcy law in 2011. The number of bankruptcy filings in Ohio last year actually fell to the lowest level seen since 2008, when the recession first had its full grip on the nation's economy.

Data from the U.S Bankruptcy Court shows that 58,846 overall Ohio bankruptcy cases were filed in the two federal districts in Ohio. That number is nearly 17 percent lower than the total number of bankruptcies filed in 2010, when Ohio residents filed 70,724 bankruptcy cases.

The Cincinnati area saw a lower drop in filings last year than seen in Ohio's northern district. Cincinnati area bankruptcy cases dropped only 12.1 percent from 2010.

The southern district of Ohio includes courts in Cincinnati, Columbus and Dayton. Filings in the southern district dropped roughly 14 percent from the number recorded in 2010.The southern district covers 30 of Ohio's 88 counties.

Chapter 7 bankruptcy cases remained the most common form of bankruptcy filings, but like in chapter 13 bankruptcy cases, the overall number of chapter 7 cases dropped last year.

A law professor from Capital University Law School believes the easing of credit and a reduction in foreclosures may account for the drop in 2011 Ohio bankruptcy cases. He says when credit becomes more available people tend to take on more debt hoping to weather the storm.

Similarly, distressed homeowners seek bankruptcy protection in many cases to stop mortgage foreclosures. As this blog discussed last week, mortgage loan companies eased back on foreclosures last year in the wake of the robo-signing scandal.

Source: Columbus Business First, "Bankruptcy filings ease in Ohio," Rick Rouan, Jan. 18, 2012

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