More San Diego County residents and businesses sought to discharge debts in bankruptcy court last year, according to court filings and local attorneys.

About 13,640 debtors filed initial petitions in the San Diego branch of U.S. Bankruptcy Court, which covers the counties of San Diego and Imperial, according to court staff.

That was 78 percent more than in 2007 and the second-largest number since the region emerged from recession in the mid-1990s. Attorneys said a dramatic spike in 2005 had more to do with changes in bankruptcy laws than with Southern California's economy, which was then at the peak of a boom.

About 84 percent of the filings last year were under Chapter 7 of the U.S. Bankruptcy Code, which allows the person or corporation to erase debts that remain after liquidating assets.

Most others were under Chapter 13, which can help a homeowner to stave off foreclosure but also entails repayment of debt under a court-approved timetable.

Filings under Chapter 11, which allows a corporation to put off debt while it reorganizes, rose to 79 from 36 in 2007, in the San Diego court.

About 1.06 million Americans filed for personal bankruptcy in 2008, an increase of more than 30 percent over 2007, according to the American Bankruptcy Institute, a research group based in Alexandria, Va.

Temecula attorney Robert Rosenstein, who represents debtor businesses in San Diego and Riverside bankruptcy courts, said business bankruptcies of both sorts have been increasing especially sharply in southwest Riverside County. He said bankruptcies appear to be rippling through the local construction industry, which is in a prolonged downturn.

"I've spoken to many that are on the brink because they're not getting paid," Rosenstein said.

In August, a group of large lenders filed an involuntary bankruptcy petition against Woodside Homes Inc. in Riverside. Court filings showed the Utah-based builder owing some $680 million, including several hundred thousand dollars that its Temecula-area subsidiary owed to subcontractors across Southern California. Woodside had been building homes in the Wolf Creek development in southern Temecula and is planning a development of 2,000 homes in Menifee, a 20 minute drive northward.

Companies seeking bankruptcy protection in the San Diego Court last year included:

- Aero Hobby Inc., an Oceanside company that made remote-controlled airplanes and helicopters under the Toytronix and Ready To Fly Fun brands. The company filed for Chapter 7 liquidation on Wednesday, listing debts of $292,000, including $150,000 to relatives of the owner. Aero Hobby stopped doing business last month, according to the filing.

- Barratt American Inc., a Carlsbad builder whose initial filing Dec. 24 put its liabilities in the range of $100 million to $500 million, including at least $11 million owed to companies in Southern California. Several people in the industry said last week that they expect Barratt American to emerge from Chapter 11 reorganization in one form or another.

- Hurricane Electric Inc., a Fallbrook company that owed $115,000 to suppliers and $65,000 in state and federal taxes when it filed for Chapter 7 liquidation in late September.

On the consumer side, attorneys have pointed to out-of-control use of credit cards, ballooning mortgage obligations, and continued increases in health-care costs. The U.S. Federal Reserve Board reported last month that credit-card and other revolving debt grew by 6 percent between September 2007 and September 2008, roughly double the rate of growth in personal incomes, though such debt ebbed slightly in October.

Contact staff writer Chris Bagley at (760) 740-5444 or cbagley@nctimes.com. Bagley blogs about local economic trends at http://bizblogs.nctimes.com.