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National Bankruptcy Research Center October 2012 Bankruptcy Filings Report

Continuing the fall trend, bankruptcy filings in October were essentially unchanged from September. Nominally, filings were up by 6%, from 90,000 in September to 96,000 in October, but because October filings typically are about 6% higher than September filings this suggests no substantial change. The continuing dropoff from 2011 filings is evident from any broader look at the data: filings in October were down 11% from last October, and filings for this year to date are down 14% from the first ten months of last year.

Nationwide, there have been about 4200 filings per million adults so for this year, one for every 235 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 about 70% above the national average, at more than 7000 filings per million adults. At the other side of the spectrum, six States have filings less than half the national average, led by Alaska, with only 1250 filings/million adults, and followed by the District of Columbia, North Dakota, Vermont, South Carolina, and Hawaii.

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. By far the highest filing county this year is Shelby County, Tennessee (Memphis), with a rate of about 16,000 filings per million adults (about 3.8 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 Georgia and Tennessee) is Milwaukee, Wisconsin, with more than 11,000 filings per million adults.

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 far West: the five States with the largest dropoff are Nevada, Hawaii, Alaska, Arizona, and California, all down by more than 22% 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 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 more than 40% 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.