While the bankruptcy rate is problematic, it’s symptomatic of a struggling economy.

It’s no coincidence that Newton County also regularly placed among the Top 10 fastest-growing counties in the U.S. by percentage growth through much of the previous decade. When the housing industry collapsed, so did the largest segment of Newton’s economy. The unemployment rate was under 6 percent for much of the decade, but hasn’t dipped below double digits since January 2009, and was at 12 percent in July.

"I’ve had builders come in here with enormous amounts of debt, because their income just stopped cold," said Shannon Sneed, a Covington-based Chapter 7 bankruptcy lawyer. "I’ve had personal friends affected by that. One minute they were out there working, making money, doing OK. The next minute they weren’t."

In addition, the housing boom was a breeding ground for inflated housing prices, uneducated first-time buyers and unscrupulous lenders.

"The places that have suffered the worst are the Southeast and far Southwest, the places where subprime lending was the highest," said Ronald Mann, a Columbia Law School professor who analyzes bankruptcy data for the National Bankruptcy Research Center.

People generally hold onto their house as long as they can, because they need a place to live. McGuire let her credit cards payments lapse first, but sank all of her monthly income into her rent and utility payments. However, foreclosures reached a high last year at 1,889, following 1,464 in 2008.

"This is the worse I’ve ever seen. The real estate market got hit very hard," said Tony Blair, an Oxford-based bankruptcy lawyer. "We’ve had little dips in the past, but in my opinion it’s worse than people think."

While developers, builders and contractors were affected directly by evaporation of their job market, others were affected in more gradual ways. Many families were able to get away with free-spending ways, because they had jobs with high incomes, houses that were constantly gaining equity and a future that looked nothing but bright.

"Some (of the reasons for bankruptcy) is beyond people’s control, but the problem is that many people don’t take into consideration that their financial consideration might change" Sneed said. "They’re doing well, with a nice house, a couple cars, a boat or motorcycle. They’re unable to hang on to all that."

McGuire’s problems started long before the most recent downturn, before she even knew it.

"We were living large. Back then I knew what a spa was," McGuire said, noting that her husband would tell her they could afford everything, while secretly taking out loan after loan.

The marriage ended in a divorce in 2001 taking the couple’s house in the process, and shortly after that she lost a good paying job as an office manager.

She spent 10 months on unemployment, finally landing her debt collector job at half her previous salary. With enough money to pay for rent and utilities, McGuire and her children lived paycheck to paycheck.

Even small things like choosing not to have income tax taken out of her unemployment checks caused crises. When the spring of 2002 came around she was expecting a refund, but was instead given a $2,000-plus tax bill. Saddled with IRS-enforced debt, McGuire stopped making regular payments on her maxed-out credit cards. When the family ran into medical problems, it had no insurance to help out with bills.

McGuire held on for a couple more years, as the economic boom reached a fever pitch. The lenders simply weren’t as worried about collecting money at the time. That changed as the 2007 calendar turned. McGuire knew garnishment would be the last step.

"Garnishments also cause problems," Sneed said. "That letter leads a lot of people to my office."

Sneed said bankruptcy is designed to stop the financial freefall, which is exactly what it did for McGuire. At the time of her bankruptcy filing, McGuire had less than $6,000 in assets, making a Chapter 7 bankruptcy option a natural choice, as she had little to protect. A Chapter 7 seeks to discharge all debt from a person, but the requirements to file are strict. Once a client makes that decision, they can’t turn back and will lose most of their assets. McGuire didn’t care.

"I could breathe again," she said remembering how she felt leaving the courthouse in December 2007. "I thought please don’t let anything happen to me because I can’t file again for 10 years. For God’s sake, I hope I don’t get into trouble."

McGuire was required to take financial and budgeting classes before her debts were discharged, and she learned a good deal.

"I don’t buy anything unless I can pay cash, except for a house. I try to solve problems before they become big," she said.

Waiting to speak to a lawyer until things are spiraling out of control is one of the biggest mistakes clients make, Blair said. A bankruptcy lawyer will help you navigate through the debts, and may even be able to write some of it off if the lender hasn’t made an effort to collect in a few years.

"Don’t wait until you’re facing a number of lawsuits for collection. When you start seeing problems, where you’re coming up short every month, get to a lawyer, sit down and talk to them," he said, noting that most reputable lawyers will give you a free consultation. "Don’t wait until the garnishments or foreclosure hit, and say hey, ‘I’m overextended.’"

And don’t trust debt consolidation agencies. Outside of a handful of companies, like CCCS Atlanta, Blair said most are scam artists that will put you further into trouble.

In another ironic moment, it was the bankruptcy that allowed McGuire a fresh start and the opportunity to once again own a home for her family. Not only did the home come at a good deal following a foreclosure, but McGuire lives with her grown daughter and son, a frugal family leaning on each other for support.