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Bankruptcy Filings Down Again 10.1% in February 2015

posted by Bob Lawless

2015 February.Year over Year ChangesThanks to Epiq Systems, the latest monthly bankruptcy figures are out, and they show a 10.1% year-over-year decline. We now have had 52 straight months of year-over-year declines in the U.S. bankruptcy filing rate. The graph to the right shows the trend in year-over-year changes.

There was a daily average of 3,422 bankruptcy filings in February, compared to 3,804 from the previous year. Total February bankruptcy filings were just over 65,000. (Daily averages are computed based on business days.)

I forecasted approximately 800,000 bankruptcy filings for the 2015 calendar year, and the first two months of the calendar year suggested we are spot on that forecast. The first few months of the calendar historically see the highest filing rates of the year. January and February usually account for about 15.5% of the annual total, and extrapolating that historical pattern to the 124,052 filings so far in 2015 puts us right at 800.000 for the calendar year.

(For new readers, reasons for the decline are explained in many of my posts collected here.)

Comments

I have been wondering about this issue for a while now, namely has the number of bankruptcy filings dropped too low?

What happens when nothing is destroyed? Are there in effect a growing number of zombie companies that are being propped up by generous credit and low interest rates that are sapping people's creative energy away from more productive pursuits?

Further does the paucity of bankruptcy activity suggest that the economy is becoming more fragile not less? If you look back, the dislocation for 2008 and later was preceded by similarly low numbers of bankruptcy filings.

There must be some equilibrium point for creation and destruction and it would seem that bu historical standards we are below that point right now.

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  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

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