Bankruptcy

The Uneven Rise and Fall of Bankruptcy Filings

By Bob Lawless

Using data from Automated Access to Court Electronic Records (AACER), I recently posted about the 4.2% drop in total bankruptcy filings for the month of April, which came on the heels of a 35% increase in the month of March. These are national figures and mask considerable variations across the country. To look at variation across the country, I compared the total daily bankruptcy filing rate for the first four months of 2010 to the daily filing rate for all of 2009. Also, I used the federal judicial districts as the unit of measurement. Although federal judicial districts are not an ideal geographic breakdown, they do allow for a little bit more nuanced picture than using state-level data and avoid what can be an overwhelming morass of county-level data (which are not readily available anyway)

There are some areas of the country that are experiencing declining or flat bankruptcy filing rates. Of the 91 federal judicial districts (not counting Puerto Rico, Guam, and the Virgin Islands), 22 have experienced a decline or no increase in the bankruptcy filing rate. As the map to the right shows (click on it for a bigger image), the areas with declines (blue) are mainly in the southeast. Nevada stands out as an exception, although that district experienced such huge increases last year, its decline for the first four months may just be a regression to the mean.

The rate of increase across the entire nation was 10%. There are 29 judicial districts that saw a rate of increase greater than 10%. Those judicial districts fall principally in three areas: the plains and west coast, the upper Midwest, and the northeast. Thus, the national statistics do mask a great deal of regional variation. I'll stop there -- my flight is about to get called.

Full post as published by Credit Slips on May 11, 2010 (boomark / email).