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LOCAL ECONOMY
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O.C. bankruptcies decline in August

The total number of businesses and individuals filing for protection fell by almost 24 percent

by Caitlin AdamsPublished: October 01, 2012 10:30 AM

The number of bankruptcy cases filed in Orange County fell in August compared to the same time in 2011, according to the most recent statistics released by the U.S. Bankruptcy Court for the Central District of California. While fewer cases were filed in every category this year, the number of filings increased over the previous month.

A total of 1,273 individuals and businesses filed for some form of bankruptcy protection in August, down 23.8 percent from 12 months ago, but up 8.4 percent compared to July. The largest number of cases filed fell under Chapter 7, the most common filing for individuals and businesses facing heavy debt, and is resolved through asset liquidation. A total of 1,008 Chapter 7 cases were filed in August, which marks a year-over-year decline of 22.5 percent, but an increase of 8.7 percent over the previous month.

The fewest number of cases in Orange County were filed for Chapter 11; while this form of protection is available to both businesses and individuals, it is most frequently applied to businesses. Unlike a Chapter 7 filing, most Chapter 11 cases allow a business to continue to operate, and most frequently undergo reorganization. Eleven Chapter 11 cases were filed in Orange County in August, down 47.6 percent over 2011, but up 57.1 percent over July.

Filing for Chapter 13 protection is likewise available to business and individual cases; however, it is most frequently applied to individuals. A total of 254 cases were filed for Chapter 13 bankruptcy, down by 27.2 percent from 2011 and up 5.8 percent from July.

There were no cases of Chapter 12 bankruptcy protection filed in Orange County in August. This chapter allows additional benefits to farmers, fishermen and their families. This number was unchanged from last year.


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