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National Bankruptcy Research Center August 2012 Bankruptcy Filings Report

After low filings in recent months, bankruptcy filings rose sharply from 90,000 in July to 102,000 in August. That makes August the first month with more than 100,000 filings since May. Although the sharp August upturn is unusual, filings for this year remain sharply down from last year – filings this year were still 10% lower than last August.

Nationwide, there have been about 3450 filings per million adults so for this year, one for every 290 adults. Four states stand out with by far the highest filing rates: Tennessee and Georgia in the Southeast and Nevada and Utah in the Southwest, all with almost twice the national average, at about 6000 filings per million adults. At the other side of the spectrum, seven States have filings less than half the national average, led by Alaska, with only 1000 filings/million adults, and followed by the District of Columbia, North Dakota, Vermont, South Carolina, Hawaii, and Texas (in increasing order of filings).

At the more granular level of county data, there is a strikingly dense pattern of high filings in Georgia and Tennessee, reflecting the presence in those States of nine of the ten highest-filing counties in the Nation. The highest filing county this year (as it has been for quite some time) remains Shelby County, Tennessee (Memphis), with a rate of more than 12,500 filings per million adults (more than three-and-a-half times the national average). The only other metropolitan area with a filing rate nearly so far above the norm (and the only county among the top-filing counties outside the Deep South) is Milwaukee, Wisconsin, with more than 9,100 filings per million adults. At the other side of the spectrum, about 60 counties have no filings at all this year, the largest of which is the Bethel Census Area in Alaska.

There is also considerable disparity in the rate at which overall filing rates are dropping. Every State has fewer filings this year than at the same time last year. But the steepest falls are in the Pacific Southwest: the four States with the largest dropoff are Nevada, Hawaii, Arizona, and California, all down by more than 20% from last year at this time. Nevada’s appearance as the State with the third highest filing rate (mentioned above) and at the same time by far the biggest dropoff from last year underscores the startlingly high level of filings in Nevada during the crisis. The association with the mortgage crisis is documented by the particularly steep decline in Chapter 13 filings – down 39% in Nevada this year.

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.