Fewer Bankruptcies in Maine

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After 6 long years of annual increases, the number of bankruptcies will fall in Maine for the first time this year. According to Epiq Systems Inc, a company that specializes in compiling nationwide bankruptcy statistics, this year it is estimated that there will be about 3,700 bankruptcy filings, a 10% decline from an all-time high of more than 4,100 filings last year. The number of filings has fallen for the third straight month. The 206 filings in July were the lowest since January 2009.

85% of Maine’s bankruptcies are business bankruptcies and the downward trend of filings may indicate a picking up of the economy. One good sign is that banks are more willing to work with businesses to help them avoid bankruptcy by refinancing borrowers’ loans, or extending the time borrowers’ are allowed to repaying back debt.

President of TD Bank in Maine, Larry Wold, said that customarily banks would recoup some of their money through bankruptcy when businesses sold off their assets after filing for Chapter 7. But these days, there are few buyers willing to purchase the assets, so banks would instead start working with borrowers themselves. “Today, because of the weak economy, trying to liquidate assets in bankruptcy is just not a successful way to go about things,” according to Wold. “It seems like a much better process to collect a little bit over time.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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