Yep, 800,000 Bankruptcy Filings This Year

My blogging has been light the past few months as we have been working on the eighth edition of what will now be LoPucki, Warren & Lawless, Secured Transactions: A Systems Approach. For you secured transactions teachers out there, we have returned a first set of page proofs and everything looks on track for publication later this year well in advance of the spring semester.

To get back into the blogging swing of things, I go to where else . . . bankruptcy filing data. Back in January, I predicted that total 2015 bankruptcy filings for the U.S. would be "somewhere around 800,000." Revisiting that prediction, the numbers seem right on track to meet it.

According to data from Epiq Systems, there have been just short of 495,000 bankruptcy filings through July 31. In recent years, the bankruptcy filings for the first seven months of the year have been 61.2% of the annual total. Extrapolating, that would put us at 808,000 filings for the year. That would be a decline of 11.2% for 2015, on the heels of a decline of 11.8% in the prior year.

Population-adjusted, the bankruptcy filing is at historic lows. On an annual basis, there are now 2.65 filings per 1,000 persons. Ignoring the statistical gyrations around the enactment of the 2005 bankruptcy law, this is the lowest it has been in 26 years.

For those who do not remember those gyrations, a swell of filers rushed to beat the law's effective date, and then filing rates plummeted as everyone who needed to file already had done so. But, even when filing rates were considered to have crashed back in 2006, the annual filing rate was still around 2.00, not that far off where the rate is today. In contrast, the annual filing rate in July 2010 was 5.23 per 1,000.

There now have been 57 straight months of year-over-year declines in the bankruptcy filing rate. The last two months have seen smaller declines (9.9% and 7.4%) than the double-digit decreases we have been seeing. It is probably too early to say whether these two months represent a longer-term trend toward a decrease in the rate of decrease or even a flattening out of the curve.

Comments

[John]

Filing are up pretty significantly in the third quarter over the same time last year.