NW Louisiana Feels Impact of Bankruptcy Rush

SHREVEPORT, La.-Bankruptcy filings are hitting record highs in northwest Louisiana, according to a report on www.shreveporttimes.com. As of Oct. 21, 5,458 residents of the 10-parish area, or 1%, had filed for bankruptcy protection. In just the first 16 days of October-the new bankruptcy law became effective Oct. 17-1,500 people filed, the article stated. This is around four times the normal month’s filings. The article quoted Shreveport Federal Credit Union CEO Helen Godfrey-Smith who said that despite the institution’s best efforts, the credit union has seen a 25% spike in member bankruptcy filings. Most of those are Chapter 13 filings, which means the credit union should recoup some of the funds. Godfrey-Smith warned that this would mean the credit union would have to tighten its lending policies for a while. “There will be reduced income to the business because our business is selling money, making loans,” she told www.shreveporttimes.com. “Ultimately, it could mean higher loan rates.” The story also said that this follows the nationwide trend of more than 200,000 new filings the week before the law went into effect. The American Bankruptcy Institute said the surge should “balance itself out” over the next couple of years.