Record Number Utahns Spiral Into Bankruptcy

Record Number Utahns Spiral Into Bankruptcy

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News Specialist Jed Boal reporting A record number of Utahns went into a financial freefall in 2002, according to numbers just released.

Statistics show 14 percent more Utahns filed for bankruptcy in 2002 than in 2001, and the spending spree isn't slowing.

The poor economy, large family sizes and the nation's youngest population are some explanations for a six-year surge in bankruptcy filings in Utah. But they don't explain everything.

Ralph Mabey is a former bankruptcy judge and the current president of the American College of Bankruptcy.

He says it all comes back to the plastic -- here and nationwide.

"Credit card debt has exploded. The savings rate has for many months gone to zero or below zero," Mabey says.

People simply spend more than they make, and that leads to bankruptcy.

In 2001, 19,342 Utahns filed for bankruptcy. In 2002, the number rose to 22,052 -- a 14 percent increase.

"The increase in 2001 was at 28 percent over the year 2000, so I guess it's lucky that it was lower than the year before," says Bill Stillgebauer, a clerk for the U.S. Bankruptcy Court.

But six years ago there were fewer than 10,000 filings. Bankruptcies have more than doubled since 1996.

When we live on the financial edge, it doesn't take much to fall. A lost job, a divorce, or a medical mishap can easily put us in dire straits.

Mabey says our borrowing, spending and savings habits are the core problem.

Credit is available to anyone. Credit card solicitations arrive by the bushelfull each year, and poorer people are borrowing more and more.

"We need education. We need preaching from the pulpit and from the schoolroom that helps us reign in our consumer impulses somewhat.

National bankruptcy statistics will be released in March, and are likely to show record numbers.

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