Sep. 20--The Credit Bureau of Erie Inc., founded in 1919, survived the Great Depression, World War II and decades of other changes to operate, by its own account, as one of the nation's oldest bill collectors.

The bureau will not make it through the current economic crisis.

Proving that even the bill-collecting industry is not immune to financial failure, the Credit Bureau of Erie has filed for Chapter 7 bankruptcy, permanently closed its offices at 115 W. 11th St. and put the building up for sale.

The bureau, a private company, lists assets of $126,207 and liabilities of $528,010, including $85,105 in unpaid income, payroll and property taxes, according to bankruptcy records. The balance sheet was so out of line that the bureau's lawyer said Chapter 7 liquidation immediately trumped Chapter 13 reorganization as the only viable option.

Along with loads of debt, the bankruptcy, filed Aug. 11, features a wealth of irony.

The Credit Bureau thrived on the overdue accounts of others, making money by collecting on past-due bills for clients and taking a percentage of the collected amount -- 25 percent to 35 percent, the office manager said -- as a commission.

The Credit Bureau's largest class of creditors in its bankruptcy are the same customers who hired the bureau to ease their financial stress. The Credit Bureau -- in its largest overall debt, according to the bankruptcy records -- owes about $320,000 to about 400 individuals and businesses for whom it was supposed to collect overdue bills but failed to remit money.

Instead, the Credit Bureau kept whatever money it collected to pay its bills and to make payroll, said its bankruptcy lawyer, Daniel Brabender. The bureau's failure to collect its customers' bills made the customers creditors twice over -- once to the original debtor and now to the Credit Bureau.

"It is ironic," Brabender said of the bankruptcy. "It is a sad situation."

He said the former customers are likely to get nothing out of the bankruptcy because the assets to be liquidated are so sparse.

Cause of the collapse

Business problems appear to have damaged the Credit Bureau more than the recession. The bureau about four years ago got behind in its accounts and was unable to recover, its longtime office manager told a bankruptcy trustee at a creditors' meeting at the federal courthouse in Erie on Wednesday.

The manager, Linda Albertson, said boxes of unmailed remittance checks meant to pay the bureau's customers were found at the residence of a bureau official after that official, a son of the bureau's owner, died in a traffic accident in 2004.

"Lack of money," the manager, Linda Alberston, said, explaining the primary reason for the Credit Bureau's collapse.

"We tried to do as much as we could," she said of the efforts to keep the business solvent starting about five years ago.