Bankruptcy

Bankruptcy Filing Rate Drops Sharply in November

By Bob Lawless

The bankruptcy filing rate fell sharply in November, declining 13.4% to a daily rate of slightly over 5,600 per day. On a year-over-year basis, November filings were down 2.7% from November 2009. The total number of filings in November -- 118,000 -- was spread over more business days making the daily filing rate decline greater than the decline in the total number of monthly filings reported elsewhere. Because the number of monthly bankruptcy filings is sensitive to the number of business days in a month, the daily filing rate is a more meaningful figure.

The drop in November is large and unexpected. For my next post, I have been working on a (simple) mathematical model to predict 2011 bankruptcy filings, and although this model works well for the rest of the year, it is unable to explain the big drop in November. That suggests something different happened with November bankruptcy filings than has happened with past experience. (One possibility was data error, but I think I have ruled out that possibility.) Unfortunately, I don't have any good explanation for the big drop in November.

Looking out toward the remainder of the year, we are looking at something right around 1,575,000 filings for the entirety of the 2010 calendar year. That is about 5.05 filings per 1,000 persons compared to the all-time high of 5.50 filings per 1,000 persons.

Finally, I often close these postings by thanking the ever-efficient people at Automated Access to Court Electronic Records (AACER) for providing the data used in my analyses. AACER's owner, Jupiter eSources LLC, was recently acquired by Epiq Systems, Inc., who have kindly continued to make the data available. So, thank you to the ever-efficient Epiq Systems for providing the same high-quality data that many of us have come to rely upon. And, a big congratulations to the people who grew AACER into a thriving, successful business and many thanks for all of your help throughout the years.

Full post as published by Credit Slips on December 09, 2010 (boomark / email).