As Aspen prepares for its most opulent annual festival - the Food & Wine Classic - it has become even more apparent that this particular mountain town exists in a wealthy bubble that just refuses to burst.   

While the rest of the country struggled this year with a 30 percent increase in bankruptcy filings over the 12-month period ending March 31, 2007, Pitkin County fared well with just 15 total filings, up from eight, in the 12-month period ending March 31, 2008, according to figures released by the Administrative Office of the U.S. Courts.   

And though the quantity of filings in Pitkin County is nearly double the amount in 2007, the miniscule value of the number means that the statistical significance of the percentage increase is far less than larger aggregate numbers; a more accurate picture can be determined by the number of filings per 1,000 residents. In Pitkin County, there were .99 filings for every 1,000 residents, compared to 2.94 for the entire United States and 3.40 for the state of Colorado. Tennessee led the nation with 6.66 filings per 1,000 residents, followed by Georgia with 5.45 and Alabama with 5.29.       
 

For the entire country, there were 901,927 total bankruptcy filings compared to 695,575 in 2007. The state of Colorado saw a 42.36 percent increase from the 11,661 filings in 2007 to 16, 601 for the 12-month period ending March 31, 2008. By comparison, Garfield County filings increased 42 percent from 50 in 2007 to 71 in 2008, while Eagle County actually saw a small drop from 29 to 26 in 2008. San Miguel County, home to Telluride, had just two bankruptcy filings.   

"The relatively small number of filings in Pitkin County in no way surprises me or anyone else," says Glenwood Springs-based attorney Michael Ford, who has handled bankruptcy proceedings in the valley for more than five years. "There's a lot of money up and down this valley, indicated by the soaring prices of housing and the effectively non-existent foreclosure rate as compared to the rest of the country. Basically, if you don't have money, you don't live here."       

The average price of single-family homes sold in Aspen this year as of March 31, according to figures from Land Title Guarantee Co., is $4.65 million. Countywide, the average home price is $4.32 million. In Basalt the average home price jumped to $3.23 million from $1.34 million last year.   

There was a small spike in 2006 after debtors rushed to file for bankruptcy before the enactment of Bankruptcy Abuse Prevention and Consumer Protection Act, which made it more difficult for consumers to discharge debt under Chapter 7. After the act went into effect, filings dropped from 1,794,795 in 2006 to 695,575 in 2007, but have been rising gradually ever since. And this year the American Bankruptcy Institute is predicting a 2008 year-end filing total in excess of 1 million, with many analysts expecting that number to be closer to 1.2 million.    

Undoubtedly, the economic crisis has caused this upward trend in bankruptcy filings. Wall Street floundering, stock market fluctuations and, particularly, the subprime mortgage debacle have left many households in dire straits.   

"Rising bankruptcy certainly understates the stress because bankruptcy is not a refuge from foreclosure," Mark Zandi, chief economist at Moody's Economy.com, recently said in a New York Times article. "Everything is going wrong for households. They are struggling with rising unemployment; high debt loads, heavier because of mortgage resets and plunging housing values; soaring gasoline prices; and wobbly stock prices. The date suggests bankruptcies will rise measurably through the remainder of the decade."   

There are actually six different types of bankruptcy filings: Chapter 7, which includes entitled liquidation; Chapter 13, for entitled adjustments of debts of an individual with regular income; Chapter 11, entitled reorganization typically used by commercial enterprises; Chapter 12, entitled adjustment of debts of a family farmer or fisherman; Chapter 9, entitled adjustment of debts of a municipality; and Chapter 15, for entitled ancillary and other cross-border cases.   

The majority of bankruptcy filings predominantly involve non-business debts. Non-business filings (also known as personal or consumer filings) were up 29 percent nationally. Filings involving business debts were up 40 percent.    

Nationally, about two-thirds of consumers who file for bankruptcy seek Chapter 7. In Colorado, the figure was closer to 85 percent, despite the Bankruptcy Abuse Prevention and Consumer Protection Act, which is designed to encourage high-income filers to Chapter 13.     In Pitkin County, of the 15 total filings, 14 were Chapter 7 and one was Chapter 13. Only two businesses have filed for bankruptcy.

damien@aspendailynews.com