Bankruptcy

May 2008 Bankruptcy Filings Continue to Show Increase

By Bob Lawless

The latest bankruptcy filing data have just become available from Automated Access to Court Electronic Records ("AACER"). Where we were just treated to a round of headlines about the government's data that went through March, the AACER data bring us current with May data.

According to AACER, there were 89,560 total bankruptcy filings (of all types) in the month of May. With 21 business days in May, that is a daily rate of 4,266. That figure represents an increase of 34% from the daily rate in May 2007. This is no one-month blip in the data. The daily bankruptcy filing rate for the first five months of 2008 (4,026 per day) is 30% higher for the first five months of 2007 (3,093 per day). So far, there have been almost 423,000 bankruptcies filed in 2008.

On a month-to-month basis, the May figure represents less than 1% increase over the daily filing rate in April. We again seem to be seeing a repeat of the monthly trend that is developing (as monthly filing figures have become available). For the past several years, the bankruptcy filing rate has stayed relatively flat during the late spring and summer months. Increases have come at the beginning and end of the year.

We are still on pace for 1,000,000 bankruptcy filings in 2008. I was surprised by how much the different predictions converge. According to the bankruptcy filing data through May, we will see

• 1,040,000 filings if bankruptcy filings continue for the rest of the year at the same daily rate (4,026 per day) as they have averaged for the first five months of 2008
• 1,050,000 filings if bankruptcy filings continue for the same daily rate (4,266 per day) as they have averaged for May 2008
• 1,077,000 filings if bankruptcy filings for the remaining seven months of 2008 constitute the same proportion of total filings as the last seven months of 2007 constituted for total filings that year (about 61%)

Also, a regression analysis on the trend for bankruptcy filings predicts total bankruptcy filings of 1,043,000 with a 95% confidence interval of 905,000 to 1,181,000 total filings.

Full post as published by Credit Slips on June 04, 2008 (boomark / email).