Bankruptcy filings in Eastern Washington and North Idaho have declined for the fourth year in a row, which could be due to the continued economic recovery, says Spokane bankruptcy attorney Kevin O’Rourke. 

O’Rourke, a Spokane-based bankruptcy attorney at Southwell & O’Rourke PS, says he thinks filings could continue to decrease.

“You know, I would expect that there might be a continued slight decrease, or stabilization over the next couple of years,” he says. 

The U.S. Bankruptcy Court’s Eastern Washington Division reported a total of 4,556 filings in 2014, down from 5,057 in 2013, a decline of about 10 percent. The number of cases was 5,464 in 2012 and 6,214 filings the year before that. 

Last year’s bankruptcy filings included 3,642 Chapter 7 cases, which seek a liquidation of assets and is the most common form of bankruptcy. Chapter 13 filings, which allow a person to present a plan of financial reorganization, numbered 908 in 2014. 

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

Bankruptcy activity in Spokane County has fallen at nearly the same pace as the district as a whole. Filings in the county fell to 1,644 in 2014, down 9 percent from almost 1,800 cases in 2013 and 19 percent from almost 2,000 cases in 2012. 

One factor that could help those who may be struggling is the current low fuel prices, O’Rourke says.

“I think as fuel prices continue to decrease, you’re going to see consumer prices lower, which will help reduce overall expenses,” he says. “And in the business industry, I think you’re going to see a decrease in net operating costs going forward, which will help their bottom line as well.” (For more on lower fuel prices, see story on page one.)

The U.S. Bankruptcy Court District of Idaho’s Coeur d’Alene court reported 890 bankruptcy cases from December 2013 to November 2014, down 14 percent from 1,026 cases for the same period a year earlier. Compared to 2012, filings in the area fell about 30 percent, and have fallen 41 percent since 2011. Coeur d’Alene had 714 Chapter 7 filings through November 2014, down from 934 in 2013.  

However, Coeur d’Alene bankruptcy attorney Cameron Phillips, of Cameron Phillips PA, says that his practice saw a slight uptick in bankruptcy cases during the second half of 2014. 

“There’s a lot of residual debt out there that’s a remnant of various things,” he says. 

Phillips says he sees a number of cases from people who have lost their jobs and turn to living off credit cards, he says. 

“Eventually people realize paying off credit card debt every month is not something that’s in their best financial interest, because of the high interest rates,” he says. “I think credit cards are an important aspect of the filings we’re seeing.” 

Another issue for some is medical debt, Phillips says, especially in Idaho.

“Because of the Idaho treatment of Obamacare—the assumption that our legislators have made that Obamacare will just die on the vine—and the refusal to accept the federal funds to increase Medicaid benefits, the cost of insurance through the Affordable Care Act has gone up three or four times over what it was last year,” he says. 

Phillips says he personally thinks that fewer people have insurance now, which is leading to more debt. However, he also says it could be that fewer people have adequate coverage or are having to pay more for the same coverage. 

“We see a lot of medical debt coming through here,” he says. 

For 2015, Phillips says he’s anticipating bankruptcy cases for his practice will stay the same or slightly increase.