Going bust is booming.
Bankruptcy filings in Maryland, up 25 percent in 1990, are up by nearly 50 percent so far this year, according to figures compiled by the U.S. bankruptcy courts.
Robert N. Schoeplein, an official with the Maryland Department of Economic and Employment Development, said that the 1991 bankruptcy numbers weren't unexpected.
"The increase in bankruptcies does not surprise me, because we're in a recovery from a two- to three-quarter recession," Mr. Schoeplein said. "Maryland in 1989 had the fifth-lowest business failure rate in the nation, per 10,000 firms. The increase in bankruptcies must be placed in the perspective."
So far this year, 13 percent more bankruptcies have been recorded in the state than were filed all of last year, according to statistics from the bankruptcy courts in Baltimore and Rockville.
In addition, the number of bankruptcies filed by Oct. 18 -- 11,657 -- represents a 46 percent increase over the total tabulated by Oct. 18, 1990, when 7,979 filings were recorded, Terry S. Miller, a spokesman for the courts, said yesterday.
The news comes on the heels of a Commerce Department announcement last week that nation's recovery from the recession appears to be stalling, based on 2.2 percent drop in the construction of new homes and apartments last month.
It wasn't clear yesterday what percentage of the filings were for businesses and how many were personal bankruptcies, Mr. Miller said. That breakdown would be available later, he said.
Last year, 10,311 bankruptcies were recorded in Maryland, of which 1,356 were for businesses, according to the Administrative Office of the United States Courts.
Americans' affinity for debt -- through credit card accounts or the multibillion-dollar leveraged buyouts so popular during the 1980s made large numbers of bankruptcies inevitable whenever the economy turned down, Lemma W. Senbet, a finance professor at the University of Maryland, said yesterday.
"If you are loaded with a lot of debt, the likelihood of you going bankrupt goes up with economic distress or difficulties," he said. "Those difficulties tend to go up when the economy is in a recession."
The increase in 1991 bankruptcies is part of a upswing that began to snowball dramatically in Maryland in 1990, Administrative Office of the United States Courts statistics show. The number of 1990 state bankruptcy filings, 10,311, represents a 22 percent increase over those recorded during 1989, which ended at 8,446.
On the other hand, 1989's figure was only about a 10 percent increase over 1988, figures show.
A cardinal precept of capitalism has always been that one man's misfortune is another's windfall. The bankruptcy explosion gripping Maryland and the nation have been no exception.
Tax accountants and bankruptcy attorneys, like Baltimore lawyer Gary Greenblatt, have profited handsomely from the rush to bankruptcy.
With a plethora of cases to choose from, Mr. Greenblatt is very picky about which bankruptcy actions he gets involved with.
"There are a number of cases that I won't take, because they're not economical," said Mr. Greenblatt, a partner at Schwarz and Greenblatt. "There are cases that demand too much of my attention -- if you invest yourself in one case so heavily, you could wind up on the short end of a bankruptcy filing."
From his vantage point of working in the trenches with companies trying to restructure or liquidate, Mr. Greenblatt is non-committal about an end to the state's economic problems. "I think the recession is still with us -- for how long, I don't know," he said.