DENVER (AP) – The number of businesses filing for bankruptcy protection in Colorado appears to have fallen in 2010 for the first time in four years.
There were 1,349 bankruptcy filings among businesses in 2010, down almost 4 percent from 1,404 the year before, according to statistics compiled by Brad Bolton, clerk of the U.S. Bankruptcy Court in Colorado.
Bolton told The Denver Post he suspects business bankruptcies were still rising, though.
Small-business owners sometimes turn to Chapter 13 filings rather than pursuing more costly Chapter 11 business restructurings. Court statistics show Chapter 13 cases in the state rose about 26 percent, from 4,143 in 2009 to 5,205 in 2010.
Meanwhile, personal bankruptcy filings in Colorado increased about 17 percent to 31,160 in 2010, up from 26,593 the year before, according to Bolton’s statistics.
The record for personal filings in Colorado was 42,023, set in 2005, when there was a change in the bankruptcy code.
Bolton said a trend he noticed last year was a sharp rise in people filing without an attorney.
Weak housing markets have forced many borrowers to seek bankruptcy protection to remove second mortgages that property values can no longer support, Boulder bankruptcy attorney Bart Balis said.
Others are seeking bankruptcy protection to forestall a foreclosure sale.
Denver bankruptcy attorney Craig Christensen predicts business filings will rise this year after the failures of United Western Bank and FirsTier Bank, two of the largest commercial banks based in the state.
Delinquent borrowers at both banks may get tougher treatment from those taking over their loans, Christensen said. “They will want to clean up their balance sheets,” he said, referring to anyone who takes over the banks’ assets.
(Copyright 2011 by The Associated Press. All Rights Reserved.)