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Bankruptcy Filings Hit 2-Year Low in January

posted by Bob Lawless

In January, households and businesses filed bankruptcies at the rate of 5,090 per day. The last time the daily bankruptcy filing rate was this low was January 2009. Monthly bankruptcy filings are sensitive to the number of business days in a month, making the daily filing rate a more meaningful figure than the absolute level of filings.

The January 2011 daily filing rate represented a 2.2% decline from December and a 5.9% decline on a year-over-year basis from January 2010. The January dip should not be overstated. The months of December and January historically are low filing months. Nevertheless, the January decline is keeping with the longer term trend of a declining bankruptcy filing rate and a long-term forecast that total bankruptcy filings will decline slightly in 2011.

And, before anyone runs around claiming that a declining bankruptcy rate is a sign of the economic recovery to come, be sure to read this post explaining why that is not necessarily so. As always, thanks for Epiq Systems for the data behind this post.

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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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