ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, January 31, 1997 TAG: 9701310045
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Larry D. Perdue of Vinton said "a lot of bad decisions" led him to file for bankruptcy liquidation.
Perdue and thousands of others - consumers and companies - set a record in bankruptcy filings last year in the Western District of Virginia.
Although Perdue faced costs of starting a carpet cleaning business, he said his filing was related to personal finances. His main problem, he said Thursday, stemmed from "a couple of credit cards" on which he became overextended. He charged more than he could possibly pay off.
Even so, he said, filing for bankruptcy "is a hard decision."
Bankruptcy filings in the district shattered all previous totals, according to John Craig II, clerk of the U.S. Bankruptcy Court in the Roanoke-based district.
He reported Thursday that 9,657 cases were filed in 1996, up 34.8 percent from the previous record of 7,161 in 1995.
Filings have increased more than 75 percent from 5,511 in 1993.
Craig said he's not sure of the reason for the large jump in the number of cases. "It's just starting to blow my mind."
Increases were "pretty much across the board" in the district's courts in Roanoke, Lynchburg and Harrisonburg. Lynchburg had the largest increase by a slight margin, but Roanoke accounted for a plurality of the cases with 4,507.
The court statistics show an increase of 43.9 percent in the number of filings for wage-earner plans for repayment of debts. Most of this increase came in the district court's Lynchburg division.
Craig said the sharp increase in bankruptcy filings is a national trend. Despite its sharp increase, the Western District of Virginia ranked only second among districts in the multi-state 4th Circuit.
If he had to cite reasons for the nationwide increase, he said, they would be easy credit and fading of the stigma that in the past accompanied a bankruptcy filing.
He said some books on running a business advise readers that they should expect to file for bankruptcy two or three times.
Not only is filing becoming socially acceptable, Craig said, but people who are discharged by the court also can qualify for credit cards and other loans almost immediately.
"Institutions stand in line to give them credit."
But Craig said the high number of filings "hurts everybody. We all pay for it in the long run."
He said the average filer lists 30 to 35 separate creditors, virtually all of them businesses that will lose money. The filers' failure to pay becomes a cost of doing business.
When a hospital, bank or store has bad debts, Craig said, the cost is passed to other customers. Everybody winds up paying a share of the cost, he said.
LENGTH: Medium: 59 lines ILLUSTRATION: GRAPHIC: Chart by staff: Bankruptcy in Western Virginia. color. KEYWORDS: MGRby CNB