In one more sign that the economy is improving, the number of bankruptcies filed in San Diego and Imperial counties plummeted in 2012, dropping 19 percent from the previous year.
Roughly 17,000 people and companies filed for bankruptcy last year, compared to 21,067 in 2011 and an all-time record of 23,069 in 2010.
Some of the noteworthy local filings included Santa Ysabel Resort and Casino, which sought Chapter 11 protection in July after incurring millions of dollars in debt to government agencies, and Mother Earth's Alternative Healing Cooperative, a medical marijuana dispensary that filed for Chapter 11 in an unsuccessful bid to stave off eviction.
But only around half a percent of the filings involved Chapter 11. Nearly 79 percent filed for Chapter 7 liquidation, with 21 percent filing for structured repayment plans under Chapter 13.
Although San Diego slipped into recession in 2007, the recessionary spike in bankruptcies began two years later. There were 20,193 filings in 2009, up from 13,633 the previous year.
“Bankruptcies tend to be a lagging economic indicator, since it takes time for people to decide that they’re going to file,” said Barry Lander, clerk of the U.S. Bankruptcy Court in downtown San Diego.
The county still has a way to go before it hits pre-recessionary levels. Lander warned that as banks loosen their credit standards, the filings could pick up again if borrowers start living beyond their means.