The number of bankruptcy petitions filed in Eastern Washington soared to a record high for the fourth straight year in 2003, and experts here say they might continue to increase this year.


Businesses and consumers last year filed 10,429 petitions seeking protection from creditors in the U.S. Bankruptcy Courts eastern district of Washington. Thats up slightly from 10,154 petitions filed in 2002 and 10,096 filed in 2001. The district encompasses all of Washington state east of the Cascade Mountains.


Nationally, bankruptcy filings also jumped to a new high last year. About 1.66 million businesses and consumers nationwide filed for protection from creditors during federal fiscal year 2003, which ended Sept. 30. That was up by 7.4 percent from 1.55 million petitions filed the previous year.


U.S. Bankruptcy Court Judge Patricia C. Williams, who serves on the bench here, says that the Inland Northwest economy, which has been flatter than the lagging U.S. economy, has contributed to the increases. She says she expects that the number of filings in the district will stay roughly the same or rise slightly this year, partly because of the agricultural industrys inability to rebound from its continuing downturn.


Kevin ORourke, a bankruptcy attorney with Southwell & ORourke PS, of Spokane, agrees that the agricultural industrys slump has fueled bankruptcy filings throughout the Columbia Basin, though he says the firm hasnt seen a significant increase specifically in such filings. He, too, expects the number of filings here to rise this year because of the weak economy and comparatively high unemployment here.


Theres no foreseen expansion in the economy that will generate a sufficient amount of jobs, he says. Well likely see a significant amount of increases in filings for a time period.


Williams says that Washington states drivers license laws, which call for suspend driving privileges for people who have overdue fines, sometimes lead people to file for bankruptcy protection to gain extra time to pay off such debts.


ORourke says that Southwell & ORourke has handled a number of consumer bankruptcy cases in which debtors who filed for Chapter 13, or wage earner, protection owed traffic fines.


Theres a significant number of people in this area who use Chapter 13 as a tool to get their license back, he says.


Mary Ellen Gaffney-Brown, an attorney here who handles bankruptcies, contends that few people abuse the system. Most people here file bankruptcies because they dont have enough income to pay their bills, she says.


We file bankruptcies for people diligently working who cant meet their expenses, she says.


Job interruptions, such as layoffs or injuries, can devastate people here, who already are making lower incomes than in many other areas, Gaffney-Brown says. That income discrepancy often leads families to use credit cards to pay for living expenses and eventually to accrue more debt than they can pay, she says.


When you have to make a choice between paying mortgage, paying heat, and putting food on the table, and your income is decreased, it becomes too easy to use your credit card at the grocery store and the gas station, she says.


Williams also says that job disruption and divorce often contribute to consumer bankruptcies and occasionally play a role in business bankruptcies. She says that the number of filings increases as the percentage of the population earning barely above the minimum wage rises.


Those people often have to resort to bankruptcy, she says. If theres something that disrupts life, it doesnt take much to push them over the edge.


Consumers accounted for 98 percent of the bankruptcy filings in the eastern district last year and in 2002.


Most of the 242 business bankruptcies filed in Eastern Washington last year involved small businesses with assets of less than $1 million, Williams says.


In Spokane County, businesses and consumers filed 3,686 petitions for bankruptcy protection last year, while in Kootenai County, 1,547 bankruptcy petitions were filed.