Bankruptcy filings in Eastern Washington and North Idaho have declined for the sixth straight year. 

The U.S. Bankruptcy Court’s Eastern District of Washington reported a total of 3,986 filings in 2016, down from 4,219 in 2015, a decrease of nearly 6 percent. The number of filings in 2014 was 4,566, down from 5,057 in 2013 and from 5,464 in 2012. 

Last year’s bankruptcy filings in the Eastern District included 3,015 Chapter 7 cases, the most common form of bankruptcy through which filers seek liquidation of assets. Chapter 13 filings, which enable a person to present a plan of financial reorganization, numbered 954 in 2016. 

The court’s Eastern District consists of the 20 counties in Washington state located east of the Cascade Mountains. 

Bankruptcy activity in Spokane County once again decreased at a rate comparable to the district as a whole. Bankruptcy filings in the county totaled 1,433 last year, down 5 percent from 1,509 cases in 2015 and 15 percent from 1,644 cases in 2014.

Spokane-based bankruptcy attorney Kevin O’Rourke, of Southwell & O’Rourke PS, says filings have been down as a result of consumers being in a better position financially. 

“Household income has been steady. Debt levels are being reduced. Home prices have regained some of their losses, and unemployment is down,” he says. “We’ve seen a slight improvement in the economy with better employment and income opportunities, so people feel less of a need to file.”

Looking ahead, O’Rourke says he expects the number of filings either to flatten out or to begin to increase. 

“If wages remain flat and interest rates increase, that will make it more difficult for consumers to service their debt, and filings will increase,” he says. “Similarly, for the business sector, with lower interest rates, businesses are better able to service their obligations. As interest rates increase, it becomes more expensive to operate and harder to service debt.” 

Spokane-based bankruptcy attorney Elizabeth McBride, of Elizabeth M. McBride PS, says that while she isn’t surprised at the overall decline in filings last year, she too thinks 2017 may be the start of an increase. 

“Previously, with the economy not being so great, people wouldn’t file because they had nothing left to protect,” she says. “If your home and car have already been taken, you’re not going to spend money on bankruptcy. You’re going to spend it on food.”

McBride says in the past few months, however, she’s begun to notice a slight increase in filings again. 

“It coincides with more businesses hiring people,” she says. “As we see people going back to work and finding jobs, they want to protect those wages from garnishments.”

The U.S. Bankruptcy Court District of Idaho’s Northern Division, which is based in Coeur d’Alene and includes Kootenai, Benewah, Bonner, Boundary, Clearwater, and Shoshone counties, reported a total of 724 bankruptcy cases for last year, down 5 percent from the prior year’s 763 cases. 

The Northern Division had 641 Chapter 7 filings for 2016, down 6 percent from the 683 reported in 2015. 

Despite a continued decline in filings for the area, Coeur d’Alene bankruptcy attorney Cameron Phillips, of Cameron Phillips PA, says his firm saw an increase in filings last year. 

“We perhaps get a larger share of cases than some other firms in the area who handle bankruptcy,” he says. “Filings were up at least 15 percent last year, and I expect we’ll see them continue to increase.”

Phillips says the firm is still seeing a large number of cases motivated by medical and credit card debt. 

“Medical debt in particular is difficult for people to deal with, and you see many cases being turned over to collectors who can be aggressive,” he says.