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National Bankruptcy Research Center August 2011 Bankruptcy Filings Report

August bankruptcy filings remained flat – slightly over 113,000 just as in July. Thus, the trend down from last year’s torrid rate continues: this year’s August filings were 11% lower than last year’s and filings this year in the first eight months are down by 10% from last year.

Nationwide, 2011 filings to date amount to about 4000 filings per million adults, about one in every 245 adults. But national disparities show that this really is an average – reflecting starkly higher and lower filing rates across the country. As has been true for some time, the highest filing rates are concentrated in the Southwest and a swathe cutting up from the Southeast. Thus, on a population-adjusted basis, Nevada still has the highest rate by far, more than twice the national filing rate (8433); Georgia, Utah, and Tennessee follow (in that order), all with more than one and a half time the national average (about 6500 filings per million adults). At the other end of the spectrum, six (mostly small) jurisdictions this year have filings less than half the national average. In ascending order, they are Washington, D.C., Alaska, South Carolina, Vermont, North Dakota, and Texas. Texas’s place on that list (with 1887 filings/million adults) is noteworthy, since its population far exceeds that of all the other low-filing states combined. Also of note among large states is New York’s remarkably low rate (2160/million adults), only slightly more than half the national rate.

Filing rates at the county level show even larger disparities. For example, the highest filing rate in the country so far this year (Henry County, Georgia) is more than three times the national rate: 12,650 filings per million adults, more than one bankruptcy filing for every eighty adults in the county. At the other end of the spectrum, there are more than sixty counties still without a single bankruptcy filing this year: all of them small rural counties; the largest by population is Mercer County North Dakota (with an adult population of about 6000). Mirroring the state data, the counties with the highest filing rates are concentrated in the Southeast, as they have been throughout the downturn. As the table below shows, all of the top ten counties were in the south and seven of the top ten were in Georgia, reflecting the high rate of filings in Georgia overall – second highest in the nation to date this year.

Henry (Georgia)12652 (1714)
Shelby (Tennessee)12232 (8193)
Rockdale (Georgia)11926 (722)
Douglas (Georgia)11857 (1082)
Newton (Georgia)11007 (275)
Walton (Georgia)10966 (701)
Butler (Alabama)9923 (149)
Cook (Georgia)9917 (120)
Ware (Georgia)9916 (269)
Calculations based on year-to-date filings. Table shows total filings in parentheses. Excludes counties with less than 250,000 adult inhabitants. National average is 4000 filings per million adult inhabitants.

Except for Shelby County (Memphis, TN), the counties listed above are rural. To get a sense for filing patterns in urban areas, the table below considers only counties with an adult population of 250,000 or more and shows the urban counties with the five highest and five lowest filing rates so far this year. After Memphis atop the list (with more than three times the national average), the highest filing rates are mostly in the southwest: Las Vegas in Nevada and Riverside and San Bernardino in California. Milwaukee is noteworthy as a newcomer to this list – bankruptcy filings there last year were not nearly so noteworthy. At the other end of the spectrum, none of the urban areas with the lowest filing rates are in the Western half of the country. The top five, all with less than one third the national filing rate, are McAllen, Texas, New York City, Charleston, South Carolina, the District of Columbia, and Austin, Texas, in that order. Again, McAllen, New York, and Austin underscore the markedly low filings this year in Texas and New York, while Las Vegas, San Bernardino, and Riverside underscore the continuing high filing rates in California and Nevada.

Shelby (Memphis, TN)12232 (8193)
Riverside (Riverside, CA)9748 (14718)
Clark (Las Vegas, NV)9470 (13274)
San Bernardino (San Bernardino, CA)9206 (13041)
Milwaukee (Milwaukee, WI)8749 (6284)
Travis (Austin, TX)1292 (1007)
District of Columbia1291 (627)
Charleston (Charleston, SC)1269 (355)
New York (New York, NY)1236 (1692)
Hidalgo (McAllen, TX)1120 (527)
Calculations based on year-to-date filings. Table shows total filings in parentheses. Excludes counties with less than 250,000 adult inhabitants. National average is 4000 filings per million adult inhabitants.

Another noteworthy trend is the sharp disparity in changes in filing rates since last year. Confirmation that the fall in filings has spread throughout the nation comes from the short list of states with filing increases over last year. The only States with filings up from last year are the relatively small states of Delaware and Utah (up by 13% and 7% respectively). At the other end of the distribution, although most states have seen filings fall, several states have seen truly remarkable drops: filings are down by 29% in Vermont and by 20% or more in Washington DC, West Virginia, and North Dakota.

The most interesting point in filing trends comes from comparing the adjacent states of Nevada and California. Although Nevada has had the highest filing rate in the country every month since the beginning of 2010, its filings during 2011 have fallen 18% this year compared to 2010. By comparison, neighboring California’s 2011 filings are down only 3% from its 2010 filings. Its large population makes this important to national trends: in August, for example, more than one in every six bankruptcy filings nationwide was in California. The result is that California has steadily risen through the ranks this year so that by mid-year its overall filing rate (5900 filings/million adults) is almost one and a half the national average.

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.