Welcome to NBKRC.com

National Bankruptcy Research Center October 2011 Bankruptcy Filings Report

October bankruptcy filings accelerated the downward trend that has filled the first three quarters of the year, falling to 106,000 from 109,000 in September. Because October filings typically are higher than September filings, this reflects an 8% drop from September on a seasonally adjusted basis. Compared to last year, October filings were down 20%. On an annualized basis, filings are down 11% this year from the same time last year.

Nationwide, 2011 filings to date amount to about 5000 filings per million adults, about one in every 200. As always, national disparities show that this really is an average – reflecting starkly higher and lower filing rates across the country. Despite a fall of almost 20% from last year’s filing rate, Nevada still stands alone at the top with more than twice the national average (about 10,400 filings per million adults). After Nevada, the highest rates are in Georgia, Utah, and Tennessee, all with about 8300 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 2360 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 (2650/million adults), only slightly more than half the national rate.

Filing rates at the county level show even larger disparities. A big surge in Memphis filings in October has put Shelby County, Tennessee at the top of the list, with more than three times the national rate (about 15,750 filings/million adults this year). At the other end of the spectrum, there are still fifty counties without a single bankruptcy filing this year: all of them small rural counties; the largest by population is Sioux County, North Dakota (with an adult population of less than 3000). 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.

Shelby (Tennessee)15919 (10662)
Henry (Georgia)15774 (2137)
Rockdale (Georgia)14948 (905)
Douglas (Georgia)14673 (1339)
Newton (Georgia)14623 (1034)
Walton (Georgia)13485 (862)
Petersburg City (Virginia)13289 (332)
Butler (Alabama)12387 (186)
Clayton (Georgia)12010 (2321)
Cook (Georgia)11818 (143)
Calculations based on year-to-date 2011 filings. National average is 5000 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, Austin, Texas and the District of Columbia, 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)15919 (10662)
Riverside (Riverside, CA)11764 (17762)
Clark (Las Vegas, NV)11687 (16382)
San Bernardino (San Bernardino, CA)11061 (15669)
Milwaukee (Milwaukee, WI)10795 (7753)
District of Columbia1610 (782)
Travis (Austin, TX)1592 (1241)
Charleston (Charleston, SC)1544 (432)
New York (New York, NY)1512 (2070)
Hidalgo (McAllen, TX)1494 (703)
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 5000 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 12% and 4% 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 30% in Vermont and by 20% or more in Washington DC, West Virginia, North Dakota, and Iowa.

Probably the most interesting point of variation comes from comparing New York to California. Though the financial crisis largely originated in New York, the State feels the effects in bankruptcy filings much less than California. For example, at the State level, filings in New York are about 2650/million, approximately half the national average; filings in California are more than 40% above the national average (7200/million). Similarly, among large cities, New York has one of the lowest filing rates in the nation (1500/million), while Riverside and San Bernardino in California both have filing rates more than twice the national average (above 11,000/million).

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.