Vermont bankruptcies soar in first quarter

Though some have called the 2008 economic situation bad enough to make it a historical pivot point for the world, 2009 is shaping up to be worse for Vermont, judging by the bankruptcy filings at the United States Bankruptcy Court in Rutland. In 2008, there were a total of 48 business bankruptcies and 1,218 consumer bankruptcies. If filings continue apace in 2009, business and consumer bankruptcies will total at 95 and 1,870, respectively. The bankruptcy filings for 2009 to date suggest that the national economic tsunami has reached levels high enough to have a strong effect on the Green Mountain State.
The court regularly calculates and posts totals for business and consumer bankruptcies, in Chapters 7 (Iiquidation of most debts and assets except for exempt items), Chapter 13 (like Chapter 7 but involving more voluntary payment of debts), Chapter 11 (reorganization, almost always for businesses but occasionally for an individual) and Chapter 12 (farms). The following calculations are based on the year-end figures for 2008 and the numbers through April 10, 2009, since postings come each Friday at the end of the work week.
In 2008, there were a total of 48 business bankruptcies (32 Chapter 7; 11 Chapter 13; 1 Chapter 11; and 4 Chapter 12. If the filings through April 10 were to continue at the same pace through 2009, there would be 95 business filings almost exactly double the 2008 total.
Consumer filings were up as well through April 10, but at a somewhat slower rate than shown in 2008. That year saw a relatively high figure for consumer flings 1,218 compared with 812 in 2007 (64 business) and 590 in 2006 (33 business).
But if filings were to continue apace in 2009, there would be 1,870 consumer bankruptcies. The grand total would fall short of the 2,000 mark, but not by much: 1,965 for 2009 versus 1,256 for 2008, 876 for 2007 and 623 for 2006.
Based on the numbers collected by Vermont Business Magazine, the more recent business filings have tended to involve higher levels of assets and indebtedness, though the court does not calculate figures for these. Possibly this indicates that previously sound enterprises are being pulled under by national forces.
One truism regarding the Vermont economy is that events occurring elsewhere have a delayed impact here. The bankruptcy filings for 2009 to date suggest that the national economic tsunami has reached levels high enough to have a strong effect on the Green Mountain State.
By Ed Barna, Vermont Business Magazine