Bankruptcies Up 7.3% From Last Year

The robust economic growth of the third quarter has yet to have much impact on bankruptcy filings. As of the week ending November 1, 2003 (week 44 of this calendar year), total personal bankruptcy filings in the U.S. for this calendar year were up 7.3% compared to the end of the same week in 2002. Weekly filings for the last four years are displayed in the chart below. These statistics are compiled directly from courthouse filings and are available to us courtesy of Lundquist Consulting (Burlingame, CA). More information is available at the firm's National Bankruptcy Research Center website: www.NBKRC.com.

Most of the growth in filings relative to 2002 occurred in the first four months of 2003. Arguably, that period saw the majority of the remaining impact of the most recent recession culminate in bankruptcies for affected households. Since mid-August the weekly filing totals have been closely tracking the weekly totals for 2002, despite a much improved economic climate compared to a year ago. This suggests that volume at the bankruptcy courts may be settling into a new, higher steady state filing rate. Ed Bankole, managing director of the Asset Finance Group for Moody's Investors Services told attendees at a recent credit industry conference not to expect any significant drop in bankruptcies. "Its just the norm, consumers are very comfortable with [filing] bankruptcies."

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