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

The U.S. Bankruptcy Court’s Eastern District of Washington reported a total of 4,219 filings in 2015, down from 4,566 in 2014, a decrease of 8 percent. The number of cases in 2013 was 5,057, down from 5,464 in 2012 and 6,214 the year before that. 

Last year’s bankruptcy filings included 3,285 Chapter 7 cases, which seek liquidation of assets and is the most common form of bankruptcy. Chapter 13 filings, which enable a person to present a plan of financial reorganization, numbered 920 in 2015. 

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

Bankruptcy activity in Spokane County decreased at a rate that’s comparable to the district as a whole. Bankruptcies in the county totaled 1,509 cases last year, down 9 percent from 1,644 cases in 2014, and 19 percent from 1,800 cases in 2013. 

Spokane-based bankruptcy attorney Kevin O’Rourke, of Southwell & O’Rourke PS, says the continued decrease in filings aligns with steady gains in the economy. 

“I think it’s different for consumers versus businesses, but both are benefiting from improvements in the economy,” he says. “Consumers have more employment options and are in a better position financially to handle debt.” 

He says businesses are benefitting from low interest rates, refinancing options, and forbearance agreements working toward helping them stay out of bankruptcy. 

The U.S. Bankruptcy Court District of Idaho’s Coeur d’Alene court reported 822 bankruptcy cases for last year down 8 percent from the prior year’s 890 cases. Compared with 2013, filings in the area have fallen about 25 percent. 

The Idaho District’s Northern Division (Coeur d’Alene), which includes Benewah, Bonner, Boundary, Clearwater, Kootenai, and Shoshone counties, had 683 Chapter 7 filings, down five percent from 714 reported in 2014.   

Coeur d’Alene bankruptcy attorney Cameron Phillips, of Cameron Phillips PA, says while he has noticed a decrease in the number of filings, the dollar volume of those filings has increased 22 percent. 

“The economic issues that lead to filings are still very much present among our population,” says Phillips. “We still see many people facing problems with their mortgages, as well as those struggling with credit card debt.”

He says much of the problem has to do with lenders charging excessive interest to their customers. 

 “Whether its payday lenders, or pawn shops, or credit card companies, as long as the creditor class is pursuing high-interest rates, people will continue to see bankruptcy as their own reasonable solution to getting out of debt,” he says.

According to O’Rourke, the decline in filings could just as easily begin to increase again, due to those same economic factors. 

“Looking ahead, I think we are going to see it flatten out and eventually begin to see an increase in filings,” he says. “Any hiccup in the economy, an increase in expenses, inflation, the price of consumer goods, etc., is going to begin to make it difficult for consumers to service the debt they have.” 

Phillips says one possible solution may lie in better financial education, particularly for young adults. 

“Youth need to see the importance of having a savings account, setting money aside so it’s there when you need it, and learning to live off the money you make,” says Phillips.