Personal bankruptcy filing rates in Centre County continue to decline, dovetailing with a national trend.
The county boasts the fourth-lowest rate in the nation, according to personal finance website NerdWallet. As part of an analysis released on Monday, the company found only 78 individuals in Centre County filed for bankruptcy from April 1, 2015, to March 31, 2016, or less than half of the state average.
Nationally, the number of filings for July fell about 14 percent from a year ago, an Epiq Systems report found. Since 2010, total filings have been more than halved, another indicator of the economy’s growing health since the Great Recession.
In Pennsylvania, the drop off is even more considerable. According to Epiq, a global technology and financial consulting firm, total filings fell to less than a third of what they were in 2010.
Bankruptcy, which offers protection to those beset by debt, became a necessary if unpalatable recourse for millions of Americans during the height of the recession. Total filings rose to more than 1 million annually from 2008 to 2011, according to NerdWallet, before receding in recent years. Last year, the country experienced its lowest number of filings since the market’s downturn.
Despite the relief from wage garnishments and potential lawsuits, filing for bankruptcy can remain on a credit report for up to a decade, limiting the ability to secure future loans and mitigating financial freedom. Nonexempt assets, for instance, are liquidated.
Courtney Miller, the analyst who conducted the research, said the county’s stronger economy and low unemployment contributed to the lower rate.
Higher incomes tended to factor into a lower number of filings, Miller added. In Centre County, the median household income was $50,295, according to the Census Bureau, or about $3,000 less than the national number.
“Those kind of economic indicators kind of say you have a pretty strong economy,” Miller said, “and unemployment has been decreasing steadily, so things like that are probably helping to drive this lower bankruptcy rate.”
Shelby County in Tennessee had the highest rate, NerdWallet found, with about 1,285 personal bankruptcy filings per 100,000 people. By comparison, Centre County had about 50 filings per 100,000 people.
According to the Middle District of Pennsylvania U.S Bankruptcy Court, Centre County has had 48 filings in 2016.
Yet for those who decide to file, there is help. Miller pointed to becoming an authorized user on a friend’s or family member’s card, co-signing a loan so one’s credit report reflects the loan is being paid or getting a secured credit card once some credit has been rebuilt.
“That’s kind of the important consumer takeaway,” she said, “is that just because you’re going through bankruptcy doesn’t mean there (aren’t) other ways to take control of your credit.”
In conducting the analysis, NerdWallet compiled the filings for 587 U.S. counties with populations of 100,000 or more. The company also calculated the number of filings per 100,00 people in each state and Washington, D.C. U.S. courts and Census Bureau data were used in the analysis.
NerdWallet assessed filings for Chapter 7, 11, 12 and 13 bankruptcy.
Roger Van Scyoc: 814-231-4698, @rogervanscy