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National Bankruptcy Research Center April 2011 Bankruptcy Filings Report

April Filings Continue Downward Trend: Bankruptcy filings in April continued the downward trend that began in January: April’s filing total of 135,000 was markedly down from 145,000 in March. That amounts to a decrease of 7% (4% if we adjust for typical seasonal variations). More broadly, filings for the first four months of 2011 are down 6% from the first quarter of 2010. Looking over an even broader time period: for four years in a row (from 2007-2010), every month’s filings were higher than the filings for the same month in the previous year, but we have now had four consecutive months in which filings were down from the previous year. The worst is behind us.

Nevada and Georgia Still Have Highest Filings in the Country: Nationwide, 2011 filings amount to about 2063 filings per million adults, about one in every 480 adults. But that figure is quite misleading, because through the course of the last two years the filing rates have become increasingly disparate throughout the country. Generally, the highest filing rates are concentrated in the Southwest and a swathe cutting up from the Southeast. Thus, on a population-adjusted basis, Nevada has almost exactly twice the national filing rate (4123); Georgia, Utah, Tennessee, and California follow (in that order), all with more than 3000 filings per million adults already this year. At the other end of the spectrum, seven jurisdictions this year have filings less than half the national average. In ascending order, they are Washington, D.C., Alaska, Vermont, South Carolina, North Dakota, Texas, and South Dakota.

Trending Worse in Delaware, Utah, and California, but Finally Better in Nevada: Perhaps the most interesting way to think about the data is to focus on the trends – changes in filings since 2010. As mentioned above, at the national level filings for 2011 have fallen steadily, about 6% below filings for 2010. But that conceals a bipolar pattern among the separate states. In five states, filings are still rising – by more than 10% in Delaware and Utah, and by smaller amounts in New Jersey, California, and Alaska. At the other end of the spectrum, scattered throughout the country are states experiencing a rapid decline in filings: a 33% drop in Vermont, 22% in Washington, D.C., 21% in West Virginia and 19% in Iowa. The most interesting in that group probably is Nevada. Although it still has the highest filing rate for 2011 as a whole (and has had the highest rate for each month this year), its filings have fallen by 15% from 2010. The disparity underscores how far out of line Nevada’s filings were last year, when they were more than 50% higher than those in any other state for much of the year. So, to pick the most obvious comparison, even though Nevada’s filings are down by 14% and California’s are still rising, California’s filing rate is still less than 75% of Nevada’s.

This analysis was performed on data collected by the National Bankruptcy Research Center (NBKRC) by NBKRC contributor Professor Ronald Mann of the Columbia Law School.