From Baltimore Colts great John Unitas to the 65-year-old Epstein's retail chain, the number of people and businesses giving up on their debts and declaring bankruptcy has zoomed to record levels in Maryland and across the nation.
Besides signaling financial difficulties, the bankruptcies are actually worsening the economy for everyone -- raising prices, tightening credit and pushing troubled businesses closer to the edge, said bill collectors, bankruptcy court officials and retailers interviewed yesterday.
The number of Maryland businesses filing for bankruptcy nearly tripled in 1990, jumping from 480 in 1989 to 1,356 last year, according to figures compiled by the American Financial Services Association, a Washington trade association for credit issuers.
Nationally, the number of business bankruptcies rose only 2.6 percent, from 63,227 to 64,853, said Judy Kent, a spokeswoman for the association.
The number of individuals filing for court protection from their creditors in Maryland rose 12.4 percent from 1989, increasing from 7,966 in 1989 to 8,955 last year, she said.
"We've never seen numbers like this before," Ms. Kent said.
Though Maryland's economy worsened, it appeared to fare better than the nation as a whole, where there was an average increase of 16 percent in personal bankruptcies to reach a record level of 718,107. And Maryland did much better than the New England area, where there was a 62 percent increase in personal bankruptcies.
In Washington, however, the number of people filing for bankruptcy protection actually declined 4 percent last year, dropping from 996 in 1989 to 958.
But business people, economists and bankruptcy officials said yesterday that the decrease in personal bankruptcies in Washington doesn't appear to have helped the regional economy. In fact, they said, Maryland's financial woes appear to have worsened dramatically in the first two months of the new year.
John Winkler, chief deputy clerk of the U.S. Bankruptcy Court in Baltimore, said filings in his office have jumped in the last several weeks.
Joy Sygel, head of the collections department of Woodward & Lothrop, a Washington-based department store chain, said her office has seen the number of bankrupt customers double in the last year.
"We are getting a lot of people who were good accounts. This is not what used to happen," she said.
The reason for the increase in filings and bad debt may not be anything as simple as layoffs, said AFSA Director of Research Ysabel McAleer. The number of filings has been rising at a double-digit pace for several years -- even during the boom times of the mid-1980s -- she noted.
As large and well-known businesses such as Eastern Airlines and Channel Home Centers Inc. file for bankruptcy, the shame associated with asking for court protection from creditors has diminished, she said.
"The more people do it, the more you hear about it, the less daunting it seems," Ms. McAleer said.
Though more socially accepted, bankruptcies and delinquencies are hurting everyone, said Tom Saquella, who heads the Maryland Retail Merchants Association.
When customers go bankrupt, creditors usually don't collect much of what they are owed, he said. "Bad debt becomes a cost, and you've got to make that up," he said.
Nationally, economists are warning that the unprecedented amount of business and personal failures is sending out costly ripples throughout the economy.
Doug Handler, a Dun & Bradstreet economist, said that his financial rating firm estimates that Americans lost $65 billion to failed businesses' bad debts in 1990 -- 50 percent more than the amount lost in 1989 and the equivalent of 1 percent of the nation's total production.
"The implications are tremendous," Mr. Handler said. Firms afraid their customers aren't able to pay bills "won't sell to marginal customers -- customers to whom they would sell in good times." That could push those marginal customers closer to financial failure.
"The reverberations are very deep," he said, although the problem is not as acute here as in other parts of the country.
On average, there was one personal bankruptcy for every 168 households in Maryland; the national average is one in 120 households.