Bankruptcy

Bankruptcy Filings Hit 2-Year Low in January

By Bob Lawless

In January, households and businesses filed bankruptcies at the rate of 5,090 per day. The last time the daily bankruptcy filing rate was this low was January 2009. Monthly bankruptcy filings are sensitive to the number of business days in a month, making the daily filing rate a more meaningful figure than the absolute level of filings.

The January 2011 daily filing rate represented a 2.2% decline from December and a 5.9% decline on a year-over-year basis from January 2010. The January dip should not be overstated. The months of December and January historically are low filing months. Nevertheless, the January decline is keeping with the longer term trend of a declining bankruptcy filing rate and a long-term forecast that total bankruptcy filings will decline slightly in 2011.

And, before anyone runs around claiming that a declining bankruptcy rate is a sign of the economic recovery to come, be sure to read this post explaining why that is not necessarily so. As always, thanks for Epiq Systems for the data behind this post.

Full post as published by Credit Slips on February 07, 2011 (boomark / email).