Report: Bankruptcies Dropping Toward Pre-Crash Levels

We’re nearing the All-Star break for baseball, which means it’s time to enjoy the annual tradition of looking at the American Bankruptcy Institute’s half-year stats. The bad news is that a butt-ton of people and businesses in the U.S. are still filing for bankruptcy, but on the up side, that number continues to show a downward trend after its most recent peak in 2010.

According to numbers provided by the Bankruptcy Institute — a name that just screams “good times for all!” — the total number of bankruptcy filings between Jan. 1 and June 30 of 2012 was a whopping 632,130.

That’s more than all the bankruptcies filed for all 12 months of 2006, when we were all too busy buying vacation yachts (to get away from our boring ol’ weekend yachts) to pay attention to the thud-thud-thud of impending doom on the march.

But it’s also a pretty impressive 14% drop off from the same period in 2011, during which there were 731,500 bankruptcy filings in the U.S.

Perhaps even better news is that the number of businesses filing for bankruptcy dropped by 22% to 30,946. This means that fewer businesses are shutting down or having to pare back drastically to restructure under bankruptcy protection, which means at least some people are keeping their jobs.

“We are on pace for perhaps the lowest total new bankruptcies since before the financial crisis in 2008,” said ABI Executive Director Samuel J. Gerdano. “With sustained low interest rates and weak consumer spending, we expect bankruptcies to stay at relatively low levels through the end of 2012.”

If one assumes that the bankruptcy rate remains steady for the rest of 2012, the year would end up with around 1.26 million total filings, a drop of about 150,000 from 2011 — and about 150,000 more than the 2008 total.

In terms of states that are still feeling the sting of bankruptcy, there are still some places with per-capita bankruptcy filing rates significantly higher than the national average 4.08 filings per 1,000 people.

Per the ABI, these are the five states with the highest per capita filing rates for the first six months of 2012:
1. Nevada (7.06)
2. Tennessee (6.99)
3. Georgia (6.49)
4. Utah (6.12)
5. Alabama (5.88)

Comments

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  1. Blueskylaw says:

    A new study shows statisticians can prove almost anything.

  2. deathbecomesme says:

    Of course Nevada is #1. When you live near Vegas you can’t help but go for broke every chance you get.

  3. Coles_Law says:

    if anyone’s curious, those numbers in parenthesis are filings per 1000 people. So, in the first half of 2012, o.75 of Nevada filed for bankrupcy. Ouch.

  4. TheMansfieldMauler says:

    Still higher than 2008.

    But then so is unemployment.
    But then so is the price of gasoline.
    But then so is the national debt.

    And so on and so on and so on……..

    • coffeeplease says:

      Um no…

      July 7, 2008—Crude oil prices settled-in at a new record of $147 per barrel. The U.S. average price for regular gasoline climbs to an all-time high of $4.11 per gallon. Road trip style vacations are put on hold for many summer travelers.

      July 4, 2012 – ” It could be slow going on the road the next few days. triple sashgs predicting this will be one of the most traveled fourth of july holidays in the last ten years with without 36 million drivers hitting the roads. aaa saying lower gas prices are one reason why. its fuel gauge report puts today’s average at $3.34 a gallon. “

      • TheMansfieldMauler says:

        Oh, good! That will offset the fact that apartment rents are higher as well.

        http://consumerist.com/2012/07/apartment-rents-rising-nationwide-to-highest-average-in-five-years.html

        • coffeeplease says:

          Of course apartment rents are higher. Whenever you have a large number of people no longer able to afford the homes they own, what do you think the alternative is?

          Nice deflection though, good work. *rolls eyes*

          • TheMansfieldMauler says:

            That makes sense. Thank goodness it’s “Recovery Summer”.

            Wait…or was that last summer?

            RECOVERY SUMMER!!!!!

            • coffeeplease says:

              Touchy touchy about our talking points are we? See that’s the problem with talking points, without facts behind them they are jibberish.

              I guess FoxLimbaugh news didn’t give you the updated memo about removing the gas price talking point from your repertoire. I had no other comment about your comment except to correct your erroneous statement. You on the other hand seemed determined to turn this into a moment to parrot your right wing masters.

              Give it a rest, one of your talking points was wrong and you stand corrected if you can bear it.

  5. dangermike says:

    This report is full of fail. One period of decline isn’t enough to establish a trend. What we’re seeing now is a relative calm before the storm. In 2007 and 2008, Alt-A loans with 2 year teaser rates were still being written, and were built on the basis of being able to afford the introductory payment with little to no thought put into what would happen if (rather, when) they were recast. This was the first wave of foreclosures, spanning 2009-2011. In the same period, a more conservative route was to take a 5/25 or 5/30 mortgage schedule in which the first 5 years of payments consist of interest only. At the end of the 5 year period, the loan recasts and payments are bumped up from interest only to interest+principal. So 5 years from 2007-8 puts us at… uh oh… right now!

    • dangermike says:

      And if you look up the statistics, the money tied up in these 5 year recasting loans is about 4 times as much as was in the Alt-A garbage that killed Wamu and Indy. And also, while we’r constantly told how unemployment is falling, the plain fact is that employment isn’t really increasing much.

  6. Libertas1 says:

    Lies, damn lies, and statistics.