The Journal reported earlier this month that the number of bankruptcies filed here fell for the third straight year. The news is the latest evidence that the economy is on the proper path to a full recovery. 

As unemployment drops and home sales continue to increase, we expect these statistical reassurances of stability to keep showing up.

But the bankruptcy numbers are especially encouraging, signaling that fewer business and individuals have been overwhelmed by debt to the point of reorganization or liquidation. The U.S. Bankruptcy Court’s Eastern District of Washington, which includes 21 Washington counties east of the Cascade Mountains, reported about 5,057 filings last year, down 7 percent from the previous year. 

In Spokane and Kootenai counties, bankruptcies decreased at a greater rate, dropping by 10 percent to 1,800 in Spokane County and by 15 percent to slightly more than 1,000 filings in the Coeur d’Alene court. 

The reduction in filings is a sign of general health for both businesses and individuals in the Inland Northwest. As Coeur d’Alene attorney Kyle Wirick told the Journal, “The folks who were affected in 2008, 2009, and 2010 are starting to dig themselves out. People are starting to get to work.”

This has occurred despite the fact that bankruptcy attorneys had projected an increase in filings for 2013 going into that year. A stipulation on the Bankruptcy Abuse and Prevention Consumer Act, which said a debtor wouldn’t have a filing for bankruptcy protection granted for eight years after the initial filing, expired last year. Some speculated that would lead to an increase in filings, which fortunately never came to fruition. For 2014, those same experts expect the downward trend to continue. 

In all this positive economic news, one trend that’s disturbing and difficult to explain is a spike in home foreclosures. After falling in 2012, foreclosures on deeds of trust in Spokane County jumped 77 percent to a record 1,211 defaults last year. The numbers are bolstered by the fact that the Spokane Multiple Listing Service reported about 1,030 distressed sales this year, up by about 100 compared with 2012. This offers some explanation as to why average home prices have increased little even as overall sales jumped more dramatically—21 percent in 2013 compared with the previous year.

While this is a concerning trend, financial institutions report having fewer bank-owned properties on their books (see related story on page 21), which gives hope that the spike was a simple aftershock of the Great Recession and that the number of foreclosures will drop this year. To be sure, the trend is one to monitor closely.

Back to bankruptcies, it’s important to note the numbers can be high in good times and bad. In Eastern Washington, filings peaked at just over 11,500 in 2005, which was in the midst of what most would describe as a period of economic growth in the Inland Northwest. 

The fact that bankruptcies have fallen at this stage in the recovery gives hope that a sustained economic upswing is imminent.