NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665
March 23, 2000
About 2,100 bankruptcy petitions were filed in North Dakota in 1998. The number of bankruptcy cases in North Dakota grew 83 percent between 1981 and 1990, and bankruptcies rose another 91 percent between 1990 and 1998, according to a recent Economic Brief released from the North Dakota State Data Center at North Dakota State University.
"The trend in bankruptcy cases in North Dakota is very troubling," says Richard Rathge, data center director. "The steep rise in cases filed in our state during the middle and later part of the 1990s stands in stark contrast to the overall economic health of the state."
According to the latest data available, taxable sales in North Dakota rose 20 percent while per capita income increased 19 percent during the last half of the 1990s. These gains occurred at a time when interest rates remained low and inflation stayed below 3 percent, Rathge says.
"The contradiction between good economic times and soaring bankruptcy cases can be explained, in part, by the sharp rise in consumer debt," Rathge continues. "In the absence of statewide data, we can draw some conclusions from national trends showing that credit card spending has increased 131 percent between 1990 and 1997--reaching $1 trillion--while credit card debt has risen 130 percent, topping $560 billion. This is at a time when personal savings in the United States dropped 87 percent, from $221 billion in 1990 to $28 billion in 1998. In short, there is a growing tendency to over-extend ourselves."
On average, bankruptcy cases in North Dakota rose 9 percent per year between 1990 and 1998 while the nation averaged 9.4 percent per year during the same period, Rathge says. States in the Northeast showed the largest average annual increases in bankruptcy petitions filed between 1990 and 1998. But Hawaii had the highest average increase--25.3 percent per year since 1990--followed by Vermont at 20.3 percent.
Rathge reports that Colorado, at 1.67 percent, had the lowest average annual increase in bankruptcies between 1990 and 1998. Along with Colorado, Alaska, Alabama and Minnesota all had average increases of less than 5 percent per year for the period.
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Source: Richard Rathge (701) 231-8621
Editor: Dean Hulse (701) 231-6136
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