Phoenix bankruptcy filings drop again in July

An increase in foreclosure may lead to increasing bankruptcies in the area.

The number of consumers who had to file bankruptcy in Phoenix declined in July, marking the fourth straight month of decline.

According to a recent report from the Arizona Republic, which relied on statistics from the U.S. Bankruptcy Court in Phoenix, there were 2,585 filings in July. That's down from the 2,656 seen the month before.

However, a report from RealtyTrac showed that the number of foreclosures in the state gave Arizona the second highest rate in the country in July, even though those figures are down when compared to the same month in 2009.

Diane Drain, a bankruptcy attorney in the state, told the newspaper that foreclosures are often a bellwether for future bankruptcy filings and that she has seen an increase in the former in the Phoenix area.

"Real estate is the biggest reason people are calling and asking for help," Drain told the Republic.

The government continues to try and help homeowners avoid foreclosure through initiatives like the Home Affordable Modification Program, which could provide lower loan payments to consumers.



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