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Bankruptcy Filings Dip Slightly in April

posted by Bob Lawless

2009 Projected Filings Thru April April 2009 bankruptcy filings dipped slightly from March. The 2.2% decline keeps the calendar year 2009 in line with recent historical patterns of heavy filing increases in the first part of the year followed by no changes or slight declines for the summer and fall months. The bottom line is that the latest numbers continue to indicate a filing rate well above 1.4 million filings for the year and perhaps close to 1.5 million filings.

As always, the good folks at AACER have provided the April filing data, and they report 128,720 filings for the month of April. Spread over the 22 business days in April, that is 5,851 filings per day. Although the month-over-month data show a 2.2% decline, the April 2009 filing rate is 38.1% higher than the filing rate in April 2008. 2009.

Using the data we have so far in 2009, we can make some predictions about the rest of the calendar year. The United States will see:

  • 1,366,000 filings if bankruptcy filings continue for the rest of the year at the same daily rate (5,462 per day) as they have averaged for the first four months of 2009
  • 1,430,000 filings if bankruptcy filings continue at the same daily rate (5,851 per day) as they have averaged for April
  • 1,490,000 filings if bankruptcy filings for the remaining eight months of 2009 constitute the same proportion of total filings as the last eight months of 2008 constituted for total filings that year (about 69.6%)

Comments

Even the modest decline in bankruptcy filings might be significant as bankruptcy filings are typically a lagging economic indicator. Leading economic indicators have recently shown significant signs of recovery, particularly the stock market averages. Declining filings for April could suggest that there were the beginnings of economic recovery in months prior to April.

This still doesn't change the fact that there are a huge number of people declaring bankruptcy, which is a horrible thing for anyone to have to do. Economically, agreed, it is a lagging indicator, but shouldn't we also feel a little sorry for the poor people affected?

It appears 13's were flat year on year. while 7's continued their increase at about 50%. Also Good Friday was in April this year whereas last year it was in march.

I don't know about bankruptcies being a lagging indicator. I haven't swallowed that one hook line and sinker. Heck, I remember when things were good we were supper busy. It seems we are in the right profession in that when the economy is chugging along people overspend when things are bad people get behind because of job loss etc.... It's like a lake, you have to have an inflow and a outflow to be healthy. I think a healthy capitalistic economy has to have a certain equalization via Bankruptcies. Otherwise the lake gets too salty and nothing can live(there I go again with my water analogies) :)

anyway...for what its worth... Our filings were up in April..... Haven't checked it with last year yet. My guess....More than last year.

This makes no sense - it appears that the second "2009" should be a "2008":

"the April 2009 filing rate is 38.1% higher than the filing rate in April 2009."

I have to agree that all indications reflect likelihood that filings for 2009 will be higher than 2004 (pre BAPCPA)

Looking at the Chapter 13 numbers published by another source, chapter 13 filings increased by 17% comparing weeks 17 in 2009 versus 2008. 2009 13's showed a total of 125,869 while in 2008 showed 107,617.

I like this blog, and I'd love to see a post about the Chrysler bankruptcy. Anyone interested in sharing their thoughts?

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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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