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Bankruptcy Filings Dropping More Rapidly Than Expected

posted by Bob Lawless

According to the most recent data from Epiq Systems, there were 120,800 bankruptcy filings in August for a daily bankruptcy filing rate of 5,250. The August daily filing rate represents a year-over-year decline of 14.8% and a decline of 3.5% from July 2011.

These latest figures represent a somewhat deeper drop in bankruptcy filings than I had expected based on my earlier forecast of a 5-10% decline for all of 2011. With the past four months showing year-over-year declines of 10% or higher, it is beginning to look like the annual decline in the bankruptcy filing rate will be above 10%.

In recent years, the last third of the year has seen, not surprisingly, about one-third of the bankruptcy filings for the year. Assuming that pattern continues, there will be between 1.41 and 1.43 million bankruptcy filings for all of 2011.

For those who like to look for economic indicators in the bankruptcy filings, you can stop right now. On a per capita basis, the U.S. bankruptcy filing rate is down 12.5% from 2004. Today, we are experiencing about 4.7 bankruptcy filings per 1,000 persons as compared to 2004 when there were 5.5 bankruptcy filings per 1,000 persons. Also, you probably can't attribute all or even most of the drop in bankruptcy filings today to the 2005 bankruptcy law. In 2009 and 2010, we were very close to the 2004 per capita bankruptcy filing rate, suggesting the currently low rate stems from other forces, most likely the ups and downs in the availability of consumer credit.


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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.