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Bankruptcy Filings Fall Dramatically in 2012

posted by Bob Lawless

2012 Bankruptcy FilingsThe 2012 calendar year bankruptcy statistics from Epiq Systems hit my in-box last night. They show that total U.S. bankruptcy filings declined in 2012 by 14.1 percent. Specifically, there were just over 1,185,000 filings in 2012 as compared to 1,380,000 in 2011.

The decline will not come as any surprise to regular readers of the blog. Bankruptcy filings have been declining since November 2010 and fell consistently throughout 2012. The question is whether bankruptcy filings will continue to decline. In a previous post, I thought they might level off in 2013, and I am working on a more complete analysis.

In his book, The Signal and the Noise, Nate Silver notes the importance of checking how one did on projections. For 2012, I projected a 9 -12% decline. The actual decline of 14.1% missed the higher end of my range by two percentage points, which isn't too far off except that I built uncertainty into my projection with a range. We did not hit the (unscientific) range that I had set, and I was cheating a little bit as sloth meant my 2012 projections happened after we had three months of filings. Still, I did better than Fitch which projected only a 4-5% decline. Overall, that is not too bad.

Oh . . . . and the answer to today's Bankruptcy Statistics Challenge is the Middle District of Alabama. 


I tend to believe that there is a correlation between a decrease in bankruptcies and the increase in short sales. If a home owner can exit their failed mortgage without a foreclosure or a bankruptcy on their credit report, all the better. This has created a win-win situation for lenders and property owners.

Simon Campbell - http://www.bankforeclosuressale.com

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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 ([email protected]) 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.