The number of Crawford Countians filing for bankruptcy were steady for the first eight months of this year, but that’s expected to climb before the end of the year, according to Traci Speer, secretary with attorney Richard Roeder of Titusville, a court-appointed bankruptcy trustee.
Speer said one reason that she predicts bankruptcies will climb is because of variable interest rates. Those rates have been rising.
Many people signed mortgages with variable-rate payments, meaning the interest rates are adjusted according to the lending institution’s guidelines. They can then legally raise the adjustable rates based on an outside indicator such as the prime interest rate.
“The variable rate mortgages are biting them,” said Speer, as borrowers’ payments could increase, perhaps each month. Many people have signed mortgages based on an amount they could pay and now are faced with paying more.
That caused 25 people in Crawford County to declare bankruptcy in one month, said Speer.
As of the end the first eight months of this year, 115 people have filed for bankruptcy in Crawford County. Last year’s number was 225 for all 12 months.
The 2007 number equates to 14 a month. Adding four more months until the end of this year would take the final to 179 — down from 225 last year.
However, Speer said she anticipates that monthly number will increase between now and January.
Another cause of the bankruptcy filings are “good old-fashioned divorces,” she added. Many couples sign mortgages based on a two-family income. When the family separates, the payments may be higher than one can afford.
The 2006 number was lower than in 2005 when 538 countians filed for bankruptcy. That year the figure was so high because of newly passed federal legislation which would make it more difficult to declare bankruptcy. With that change coming, many people took advantage of the “easier bankruptcy” process before it changed over.
The new law implemented an income means test for the first time.
Roeder presides over various hearings involving a person declaring bankruptcy and their creditors before the final bankruptcy hearing is held before a judge. He is the trustee for all bankruptcy cases in Crawford and Venango counties.
