LI bankruptcies continue to climb

The number of Long Islanders resorting to bankruptcy has continued to mount in recent months, reaching the highest level in March since at least June 2007, according to court records.

A total of 1,040 bankruptcy filings were recorded in March, a 22 percent increase over a year ago. In April, another 994 individuals or businesses sought bankruptcy protection.

In 2009, there was a total of 10,028 cases filed on Long Island. That's an 84 percent increase over 2007, and a level surpassing record highs before national bankruptcy reforms in 2005.

Bankruptcy attorney Scott Schneider of Hicksville said the impact of local job losses was still being felt. "The economy is still bad."

Schneider said he has seen more homeowners in trouble because they can no longer take home equity loans now that housing values have declined. With children starting college or credit hard to come by, he said, "the income's just not there." Self-employed business people such as "restaurant owners and plumbers - they're the ones that need the help."

Nationwide, filings were also up in March, according to the National Bankruptcy Research Center, based in Burlingame, Calif. While the month of March usually has a high filing level, the group said it had increased 23 percent compared to a year ago. In 2008 and 2009, the pace of bankruptcy filings on Long Island outstripped national growth.

Experts have said bankruptcy filings tend to lag other economic indicators, since someone who loses a job may be able to get by for some time before having to turn to bankruptcy.

Rick Stern, a Melville bankruptcy attorney and a court-appointed trustee for Chapter 7 liquidation cases, said, "There are a lot of people that need financial help." Stern cited the region's high cost of living, unemployment, reliance on credit cards and high medical costs as factors that lead consumers to seek bankruptcy protection.

Several years ago, Stern said, a consumer with more than $75,000 in debt stood out as unusual. These days, he said, "there are many more people coming in owing substantially more than that."

He said, "I don't get a sense it's slowing up."

Among other monthly economic indicators, new vehicle registrations were up nearly 30 percent compared to a year ago - although that merely reversed a decline of that amount from March 2008. Also, foreclosure filings were down nearly 20 percent from a year ago.

Newsday periodically tracks economic indicators in this Long Island Economic Snapshot.