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Bankruptcies Are Poised to Rise Again
According to several recent forecasts, personal bankruptcies are headed sharply upward in 2001. SMR Research predicts a 10% to 20% increase in filings for 2001. Visa U.S.A. expects the number of filings to hit 1.7 million by 2002, about 300,000 higher than the record of 1,378,140 set in 1998. Morgan Stanley Dean Witter economists expect a 10% rise in 2001 followed by a 13% rise in 2002. These forecasts may have sounded excessively gloomy 6 months ago amidst worry about an economy growing too fast, but in the current environment they are giving creditors pause.
To be sure, personal bankruptcy filings through the third quarter 2000 were still below 1999 levels. The latest data from the Administrative Office of the U.S. Courts show that during the 12 months ending September 30, 2000 there were 1,226,037 petitions filed for personal bankruptcy relief, a decline of 6.8% from the 12 months ending in September, 1999. The table at the end of this article provides a breakdown of filings by state and bankruptcy district, as well as by chapter under which the petitions were filed. Overall, 69.7% of petitions were filed under Chapter 7, in which about 95% of current borrowers are exempt from any asset liquidation and have their debts discharged as prelude to a "fresh start."
The U.S. Court data show that the rate of decline continues to slow. Of the 91 judicial districts that comprise the 50 states and Puerto Rico, 24 experienced an increase in their 12-month filing volume as of the end of September. Filings during just the third quarter, 2000 were only 4.5% lower than in the third quarter of 1999. As illustrated in the nearby chart, this marks the seventh consecutive quarter during which personal bankruptcies dropped on a year-over-year basis, but the rate of decline has been getting smaller since the beginning of the year.
Printer-Friendly Chart
Indeed, signs of an upturn in filings are evident in more recent data compiled through Visa U.S.A.'s Bankruptcy Notification Service. Through December 16th the number of personal bankruptcy petitions filed during the 4th quarter of this year was about 2% higher than for the same 11-week period in 1999. The nearby chart, which displays bankruptcy filings per week, reveals that, since late August, petition volume has actually been greater this year relative to 1999.
Printer-Friendly Chart
| Personal Bankruptcies in 2000 by State and Judicial District For the 12-Month Period Ending September 30, 2000 |
|||
|---|---|---|---|
| Total Filings as of 9/30/2000 |
% Change in Total 9/30/2000-9/30/1999 |
% Chapter 7 as of 9/30/2000 |
|
| Total | 1,226,037 | -6.8% | 69.3% |
| Alabama | 31,900 | 5.6% | 39.7% |
| Middle | 6,828 | 4.9% | 42.6% |
| North | 19,923 | 4.6% | 37.7% |
| South | 5,149 | 10.9% | 43.4% |
| Alaska | 1,301 | -6.7% | 92.5% |
| Arizona | 20,402 | -9.2% | 81.5% |
| Arkansas | 16,405 | 0.5% | 57.6% |
| East | 10,256 | -0.1% | 51.5% |
| West | 6,149 | 1.5% | 67.9% |
| California | 146,246 | -20.6% | 79.7% |
| Central | 83,540 | -20.4% | 79.9% |
| East | 29,822 | -14.5% | 85.0% |
| North | 19,997 | -28.0% | 71.5% |
| South | 12,887 | -22.2% | 78.5% |
| Colorado | 15,093 | -8.2% | 84.5% |
| Connecticut | 10,850 | -11.5% | 86.8% |
| District Of Columbia | 2,434 | -7.1% | 65.5% |
| Delaware | 2,322 | -5.8% | 65.7% |
| Florida | 71,941 | -5.2% | 71.7% |
| Middle | 39,913 | -6.0% | 71.3% |
| North | 5,049 | 1.0% | 78.2% |
| South | 26,979 | -5.2% | 71.1% |
| Georgia | 57,601 | 0.1% | 36.9% |
| Middle | 14,319 | 1.1% | 41.1% |
| North | 31,163 | -1.4% | 40.1% |
| South | 12,119 | 3.0% | 23.6% |
| Hawaii | 4,609 | -18.1% | 89.1% |
| Idaho | 6,872 | -1.1% | 80.7% |
| Illinois | 60,671 | -5.0% | 70.9% |
| Central | 11,369 | -2.7% | 84.7% |
| North | 42,537 | -6.5% | 67.1% |
| South | 6,765 | 0.7% | 71.3% |
| Indiana | 37,182 | -1.9% | 80.1% |
| North | 14,032 | -1.5% | 84.4% |
| South | 23,150 | -2.1% | 77.5% |
| Iowa | 8,028 | -4.7% | 93.4% |
| North | 3,209 | -6.5% | 96.5% |
| South | 4,819 | -3.5% | 91.4% |
| Kansas | 11,357 | -2.6% | 81.1% |
| Kentucky | 20,574 | -0.6% | 83.2% |
| East | 8,831 | -1.3% | 87.6% |
| West | 11,743 | -0.1% | 79.9% |
| Louisiana | 22,208 | -0.3% | 57.3% |
| East | 8,008 | 8.2% | 62.9% |
| Middle | 2,740 | 0.7% | 70.2% |
| West | 11,460 | -5.7% | 50.3% |
| Maine | 3,865 | -5.3% | 93.0% |
| Maryland | 30,136 | -6.1% | 68.2% |
| Massachusetts | 15,699 | -18.0% | 86.2% |
| Michigan | 35,999 | -2.5% | 72.2% |
| East | 24,882 | -2.7% | 71.3% |
| West | 11,117 | -1.9% | 74.3% |
| Minnesota | 13,805 | -7.9% | 79.5% |
| Mississippi | 18,032 | 2.0% | 60.0% |
| North | 6,020 | 2.9% | 61.6% |
| South | 12,012 | 1.5% | 59.2% |
| Missouri | 25,607 | -6.2% | 71.0% |
| East | 14,889 | -8.0% | 62.0% |
| West | 10,718 | -3.5% | 83.4% |
| Montana | 3,203 | -4.6% | 88.7% |
| Nebraska | 5,429 | -1.7% | 85.0% |
| Nevada | 13,866 | -5.9% | 73.5% |
| New Hampshire | 3,461 | -13.3% | 91.7% |
| New Jersey | 37,248 | -10.4% | 63.9% |
| New Mexico | 6,526 | -6.1% | 85.1% |
| New York | 58,154 | -15.9% | 80.8% |
| East | 22,670 | -18.7% | 79.3% |
| North | 13,085 | -11.5% | 82.9% |
| South | 12,062 | -20.9% | 86.7% |
| West | 10,337 | -8.3% | 74.3% |
| North Carolina | 25,853 | 0.3% | 41.8% |
| East | 10,163 | -2.7% | 46.4% |
| Middle | 9,002 | 6.2% | 33.6% |
| West | 6,688 | -2.5% | 45.8% |
| North Dakota | 1,898 | -6.4% | 96.5% |
| Ohio | 52,185 | -2.4% | 78.6% |
| North | 26,801 | -2.0% | 80.5% |
| South | 25,384 | -2.8% | 76.5% |
| Oklahoma | 18,265 | -9.2% | 86.2% |
| East | 3,534 | -0.4% | 93.6% |
| North | 4,609 | -5.7% | 88.6% |
| West | 10,122 | -13.3% | 82.4% |
| Oregon | 16,105 | 4.2% | 85.5% |
| Pennsylvania | 42,652 | -1.2% | 69.4% |
| East | 20,927 | -4.8% | 55.4% |
| Middle | 9,669 | 2.0% | 79.8% |
| West | 12,056 | 2.8% | 85.3% |
| Rhode Island | 4,615 | -8.9% | 93.2% |
| South Carolina | 11,569 | 2.6% | 47.8% |
| South Dakota | 1,981 | -5.3% | 96.6% |
| Tennessee | 47,510 | 3.3% | 43.9% |
| East | 15,207 | 3.8% | 56.7% |
| Middle | 11,229 | 4.2% | 60.4% |
| West | 21,074 | 2.5% | 25.9% |
| Texas | 59,307 | -7.7% | 53.0% |
| East | 8,681 | -4.0% | 50.7% |
| North | 19,568 | -7.8% | 51.4% |
| South | 16,188 | -7.3% | 54.6% |
| West | 14,870 | -10.0% | 54.5% |
| Utah | 14,277 | 5.8% | 60.0% |
| Vermont | 1,433 | -18.2% | 91.9% |
| Virginia | 35,656 | -8.1% | 74.2% |
| East | 26,276 | -9.2% | 71.1% |
| West | 9,380 | -4.9% | 82.7% |
| Washington | 30,642 | -1.7% | 77.5% |
| East | 7,878 | 5.8% | 76.1% |
| West | 22,764 | -4.0% | 78.0% |
| West Virginia | 8,182 | 3.3% | 94.9% |
| North | 3,271 | 1.6% | 94.0% |
| South | 4,911 | 4.4% | 95.5% |
| Wisconsin | 17,214 | -2.9% | 84.7% |
| East | 12,075 | -2.7% | 82.4% |
| West | 5,139 | -3.1% | 90.3% |
| Wyoming | 1,962 | -2.7% | 93.7% |
| Guam | 135 | 48.4% | 82.2% |
| Nmi | 10 | 0.0% | 90.0% |
| Puerto Rico | 15,508 | -10.3% | 29.2% |
| Virgin Islands | 52 | -16.1% | 78.8% |
| Circuit | |||
| 1st | 43,148 | -12.9% | 67.5% |
| 2nd | 70,437 | -15.3% | 81.9% |
| 3rd | 82,274 | -5.7% | 66.8% |
| 4th | 111,396 | -3.9% | 63.8% |
| 5th | 99,547 | -4.5% | 55.2% |
| 6th | 156,268 | -0.5% | 67.2% |
| 7th | 115,067 | -3.7% | 75.9% |
| 8th | 73,153 | -4.6% | 74.5% |
| 9th | 243,391 | -14.7% | 80.0% |
| 10th | 67,480 | -4.5% | 79.5% |
| 11th | 161,442 | -1.4% | 53.0% |
| States And Territories In Each Circuit: | |||
| 1st: ME, MA, NH, RI, PR | |||
| 2nd: CT, NY, VT | |||
| 3rd: DE, NJ, PA, VI | |||
| 4th: MD, NC, SC, VA, WV | |||
| 5th: LA, MS, TX | |||
| 6th: KY, MI, OH, TN | |||
| 7th: IL, IN, WI | |||
| 8th: AR, IA, MN, MO, NE, ND, SD | |||
| 9th: AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, NMI | |||
| 10th: CO, KS, NM, OK, UT, WY | |||
| 11th: AL, FL, GA | |||
| Source: Administrative Office Of The U.S. Courts. | |||
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