(Source: By Kim Smith, The Arizona Daily Star) Tucson – Five years ago, the Compo family had the world by the tail.

They were living in their newly built dream home with their three kids. They had money in the bank, cash to splurge on the kids, two cars and various toys, like an all-terrain vehicle.

Andrew was working 70-hour weeks, and Tracy had two jobs so they could afford nice things.

Today, the Tucson couple are in the middle of bankruptcy proceedings and living in a rental home outfitted with donated or traded furniture.

Tracy uses a borrowed van to take the kids to school and go to work. Andrew is driving their beater to his prison-guard job; their other car was repossessed.

West sees growth in filings

Although the number of people and businesses filing for bankruptcy is slowing down across most of the nation, the Compos are among a record-setting number of people who filed for bankruptcy in Arizona last year.

Thirteen states recorded an annual decline last year, mainly in the South, The Associated Press reports. The West, however, saw ongoing growth in filings. Arizona’s bankruptcy rate increased 18 percent overall.

In total, the nation recorded 1.55 million filings in 2010, an increase of 8 percent from 2009 and a far slower growth rate than the 32 percent jump recorded in the year before and the 33 percent jump the year before that, according to The Associated Press.

Brian Karth, clerk of the court for the U.S. Bankruptcy Court in the District of Arizona, said bankruptcy filings are up so much here he’s had to hire 15 additional clerks to keep up.

Last year, the court handled nearly 42,000 filings — shattering the record 39,000 set in 2005 when changes were made to bankruptcy laws, Karth said.

Karth believes the West’s bankruptcy figures are higher than other states simply because its unemployment rates are higher.

Arizona had an unemployment rate of 9.4 percent and California had a rate of 12.4 percent in November, compared with 3.8 percent in North Dakota, 4.6 percent in Nebraska and 5.4 percent in New Hampshire, the U.S. Labor Department says.

The forecast for this year remains unclear, Karth said.

Several banks that imposed a moratorium on home foreclosures so they could review their policies and procedures are beginning to lift them, which may force more people to seek protection, Karth said.

World turns upside down

Tracy Compo, 32, said their financial troubles began three months after they moved into their four-bedroom home near Ryan Airfield on Tucson’s far southwest side. The Arizona Department of Corrections eliminated overtime for its corrections officers and imposed a pay cut, and she lost both of her jobs.

The couple sold everything they could to try to make their $1,600 a month mortgage payments, and pleaded with their mortgage company to work with them, but they lost the house.

Over the next couple of years, the Compos have lived in a series of increasingly smaller rental homes, but have continued to struggle to pay the bills.

Bill collectors were calling at 6 a.m., the couple’s marriage suffered and some months they had to go to a food bank.

“That was really embarrassing, but you do what you’ve got to do to take care of your children,” Tracy Compo said.

The couple cut back on expenses. They gave up their dogs because they could no longer afford the vet or food bills. She clipped coupons, used price-match ads, turned to generic brands and began hitting thrift stores and Craigslist, Compo said.

She tried to start a home day-care center, but that didn’t work out, so she began to clean strangers’ homes.

“I’m lucky when I can say, ‘Guess I can pay my phone bill this month’ or when I can go to the grocery store to get some lunch meat,” Compo said.

The final straw was the garnishment of Andrew’s wages by their credit card companies, Compo said.

They had no choice but to file for bankruptcy, she said.

Although it was exceedingly embarrassing, Compo said the relief she felt afterward was huge.

The couple plans to never buy anything on credit again.

“We never want to have another car payment or credit card bill,” Compo said. “It’s cash or we’re not getting it. It’s a lesson well-learned. We want to be able to go to the grocery store and be able to get something without worrying about spending our gas money.”

“We never want to have another car payment or credit card bill. It’s cash or we’re not getting it.”

Tracy Compo

whose family is in the middle of bankruptcy proceedings

BY THE NUMBERS

Percentage 2009 2010–change

Tucson

Chapter 7 5,050 6,173 +22

Chapter 11 83 94 +13

Chapter 13 1,183 1,363 +15

Phoenix

Chapter 7 18,526 23,594 +27

Chapter 11 446 463 +4

Chapter 13 3,797 4,791 +26

–Through November 2010

Source: U.S. Bankruptcy Court, District of Arizona

Contact reporter Kim Smith at kimsmith@azstarnet.com or 573-4241.

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A service of YellowBrix, Inc. Publication date: 2011-01-09