Welcome to NBKRC.com

National Bankruptcy Research Center September 2011 Bankruptcy Filings Report

September bankruptcy filings continued the steady downward trend of the last several months, falling to just under 109,000 from about 113,000 in August. Thus, the trend down from last year’s torrid rate continues: this year’s September filings were 17% lower than last year’s, filings for the third quarter of this year were down 15% from last year, and filings in the first nine months of this year are down 10% from last year.

Nationwide, 2011 filings to date amount to about 4500 filings per million adults, about one in every 220 adults. As always, national disparities show that this really is an average – reflecting starkly higher and lower filing rates across the country. Reflecting the lingering effects of the economic downturn, 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 (9412); Georgia, Utah, and Tennessee follow (in that order), all with more than one and a half time the national average (about 7400 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 2124 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 (2407/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: more than 14,000 filings per million adults, one bankruptcy filing for every seventy adults in the county. At the other end of the spectrum, there are still almost sixty counties without a single bankruptcy filing this year: all of them small rural counties; the largest by population is Bedford City, Virginia (with an adult population of about 5000). 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)14224 (1927)
Shelby (Tennessee)14067 (9422)
Rockdale (Georgia)13396 (811)
Newton (Georgia)13293 (940)
Douglas (Georgia)13248 (1209)
Petersburg City (Virginia)12088 (302)
Walton (Georgia)12077 (772)
Cook (Georgia)11405(138)
Butler (Alabama)11121 (167)
Ben Hill (Georgia)10809 (136)
Calculations based on year-to-date 2011 filings. National average is 4500 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)14067 (9422)
Riverside (Riverside, CA)10788 (16288)
Clark (Las Vegas, NV)10584 (14836)
San Bernardino (San Bernardino, CA)10153 (14382)
Milwaukee (Milwaukee, WI)9780 (7024)
District of Columbia1483 (720)
Travis (Austin, TX)1433 (1117)
Charleston (Charleston, SC)1394 (390)
New York (New York, NY)1381 (1891)
Hidalgo (McAllen, TX)1313 (618)
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 4500 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 6% 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, 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 5% from its 2010 filings. Its large population makes this important to national trends: in September, 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 (6600 filings/million adults) is almost one and a half times the national average. The good news is that California’s filings finally appear to have experienced a break; filings in September in California were down 7% from August (on a seasonally adjusted basis) and 18% 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.