THE FLINT JOURNAL FIRST EDITION
By Melissa Burden

Flint -- Jason Croff's recent divorce sent him seeking financial refuge from his debts.

Hoping to start again with a clean slate, Croff, 30, of Davison recently filed for Chapter 7 bankruptcy protection. It is the most common type of bankruptcy, where assets are liquidated to pay creditors, and if there are no assets, debt is wiped away.

Croff, the father of three, said his income took a big hit after the divorce, and he can't afford a $264 weekly child support order for two children, a mobile home, a van and credit card payments.

"I can't even pay normal bills, let alone anything else," said Croff, who works route sales for Schafer Bakeries Inc. in Burton and earns about $50,000 a year, mainly through commissions.

Croff, who has custody of his 11-year-old son, said that with slow seasonal bread sales, he recently brought home $208 for a week, not even enough to cover his child support order.

Divorce is one of the primary reasons people file bankruptcy.

In Genesee County last year there were 3,592 bankruptcy filings, up 426, or 13.46 percent, from 2002.

Filings were up in Lapeer and Shiawassee counties by 9.93 percent and 17.58 percent, respectively.

Chapter 11 business bankruptcies fell in each of the three local counties in 2003, while Chapter 7 and Chapter 13 filings -- where people repay part of their debt over three to five years -- were up in the counties from 2002.

Local figures mirror the jump in filings for the U.S. Bankruptcy Court Eastern District of Michigan, which covers 34 counties, including Genesee, Shiawassee and Lapeer counties. In 2003, filings were up 14.48 percent to 45,629.

Along with divorce, high consumer spending coupled with a layoff, reduced income or medical expense can send someone into bankruptcy.

"Too many American households are simply living paycheck to paycheck, making them candidates for tomorrow's bankruptcy statistics," Samuel J. Gerdano, executive director of the Alexandria, Va.-based American Bankruptcy Institute, said last month after national bankruptcy figures were released for 2003.

Bankruptcies were up 5.2 percent from 2002 to 1.66 million in 2003, the Administrative Office of the U.S. Courts said. That's down slightly from the historic high of nearly 1.662 million filings in a 12-month period.

There are alternatives to filing bankruptcy, including seeking credit counseling. Some who seek counseling have 30 or more credit cards and are as young as 18, although others are into their 70s and 80s.

GreenPath Debt Solutions offers a free budget consultation where counselors determine if they can help someone, said Nancy Kennedy, a certified credit counselor at the Flint Township office that has 900 clients.

"A lot of times we can help them avoid bankruptcy," she said.

Counselors may offer suggestions to avoid filing for bankruptcy, such as selling a house or a pricey toy, Kennedy said.

Credit counselors often can help people who can afford to make payments to creditors by getting a lower or zero interest rate and by axing late and over-the-limit fees.

"If things get too tough, bankruptcy is there for you," Kennedy said.

In the past six months, Kennedy said, she's seen numerous people whose income, hours or overtime has been cut or they've been laid off, including Kmart and Meijer managers who lost their jobs.

"This is the worst I've seen in seven years here," she said.

Michael A. Mason, a local Chapter 7 bankruptcy trustee and a Chapter 13 and Chapter 7 bankruptcy attorney, said he's seeing more seniors saddled with rising expenses and younger people filing.

"It used to be we saw very few students or people who were just coming out (of college)," he said. "We're beginning to see more of them now, more than I've seen in the past years."

That could be attributed to a tough job market, Mason said, adding that many younger people are having trouble finding a job after college and making student loan payments.

Mason said some of his clients have gone through credit counseling, but end up filing for bankruptcy when the money isn't enough to live on.

"Most of the people I get have done everything they can to take care of the problem, and they just can't, and there's nothing else they can do," he said.