Foreclosures, Bankruptcies Down As Economy Improves

The number of Chattanoogans  defaulting on their mortgages or going broke fell below the year-ago level as the economy improved early in 2012.  Although these are good signs, foreclosure notices in the first quarter were still up from the fourth quarter of 2011, according to data released by online services, Realty Trac.

Tennessee led the nation in the rate of personal bankruptcy filings in the first quarter of this year, too.

According to Brandon Moore of Realty Trac, first quarter trends were a mixed bag.  He said, “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity form the previous quarter – an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.”  With one foreclosure notice for every 325 households in the first quarter, Chattanooga’s foreclosure rate was 30 percent below the U.S. average.

Bankruptcy filings by Chattanoogans seeking court protection from debtors were down in the first quarter for the second consecutive year.  The Chattanooga Office of the U.S. Bankruptcy Court had 1,708 bankruptcy filings for the months of January through March and that was 6.8 percent less than the number of filings in the same period a year ago.

Nationwide, though, court filing were down an even stronger 12 percent in the first quarter.

Samuel Gerdano, executive director of the American Bankruptcy Institute (ABI), said in a report on the first quarter filings, “We expect that 2012 bankruptcy totals will be less than last year as companies and families remain vigilant in cutting costs and shoring up their balance sheet.”

Even with these improvements, Tennessee, Georgia and Alabama still remained among the top states for the highest rate of bankruptcies in the first quarter of this year.  According to ABI, Tennessee’s per capita filings during the first three months of 2012, were 77 percent higher than the U.S. as a whole.  There’s still room for improvement!

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