Bankruptcy Update

In recent years, personal bankruptcy filings have declined somewhat over the summer months. No such decline has been evident this summer. Visa U.S.A.'s Bankruptcy Notification Service indicates that through the first 33 weeks of this year (period ending August 18, 2001), personal bankruptcy petitions in the U.S. are up 22.8 percent over the same period in 2000. Year-to-date filings through August 18 totaled 938,807, compared to 764,692 at the same point last year. If this pace continues through the end of the year, total filings for 2001 should top 1.5 million, a new record. The chart below provides a week-by-week comparison of filings in 1999, 2000, and 2001.

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Newly released figures from the Administrative Office of the U.S. Courts provide more detailed information on where bankruptcy growth is occurring. The short answer is: nearly everywhere. Of the 91 bankruptcy judicial districts that make up the 50 states, District of Columbia and Puerto Rico, only 10 districts experienced declines in petition volume during the 12 months ending this past June, relative to a year earlier. The table below summarizes filing data for the 12 months ending June 30, 2001 by state and judicial district. Note that during the 12-month period, personal bankruptcies were 8.8 percent higher than for the 12-month period ending June 30, 2000. This seemingly low percentage growth rate compared to the Visa tracking reports is a result of much slower growth in bankruptcies a year ago, and reinforces the sharp upward surge in bankruptcies since the first of this year. In fact, focusing only on filings during the second quarter, data from the U.S. Courts reveal that 390,064 personal bankruptcy petitions were filed in 2001, compared to 317,486 in 2000, a 22.9 percent increase.