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National Bankruptcy Research Center April 2012 Bankruptcy Filings Report

On the surface, the bankruptcy filings report for March looks distressing. Bankruptcy filings in March were up by 29% from January (124,000 as compared to 98,000). This is the highest level of filings in the last eleven months (since last April). So it would be reasonable to worry that this presages a sharp upturn toward the high filing levels of 2010 and 2011. But in truth the upturn is not nearly so ominous as it seems, because March is traditionally one of the highest filing months of the year. This is the month in which distressed households start using their tax refunds to defray the costs of seeking bankruptcy relief. Thus, taking account of the customary seasonal variation, filings in March were actually down slightly (about 1%) from February. More broadly, filings were down 14% from last March, and filings for the first quarter are down 11% from the same time in 2011.

Nationwide, there have been about 1300 filings per million adults so for this year, one for every 770 adults. Interestingly enough, as the tide of bankruptcy filings finally begins to recede, regional disparities also have started to diminish. Thus, the States with the highest filing rates this year are not even at twice the national rate: Georgia and Tennessee at 2300 and 2250 filings per million adults, respectively. To be sure, the highest concentrations of filers are increasingly concentrated in the Southeast. For example, all ten of the highest-filing counties in the Nation are in Georgia or Tennessee – led by Shelby County, Tennessee (Memphis), with a rate of more than 4,000 filings per million adults (more than three times the national average). At the other side of the spectrum, the States with the lowest filing rates are scattered throughout the Nation: the lowest are Alaska, Washington, D.C., North Dakota, Vermont, and South Carolina (all with rates between a third and half of the national average). The best news from this year’s filing data certainly is for the Pacific Southwest. Where California and Nevada spent most of the last few years at or near the top of the filing rates, filings in both States are down about 20% from last 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.