New York, Jan. 5, 2012—The number of personal bankruptcy filings in the United States dropped 12 percent last year, from slightly more than 1,500,000 in 2010 to 1,350,000, according to an analysis by Columbia Law School Professor Ronald Mann.
Nationwide, bankruptcy filings totaled about 5,800 per million individuals, meaning about one of every 175 Americans filed for bankruptcy protection. In 2010, about one of every 150 Americans filed for bankruptcy protection.
It was the first year-on-year drop since 2006, according to Mann, who performed the analysis for the National Bankruptcy Research Center. He cautioned against reading too much into the decline.
“Based on an increase in filings in November and December, and seasonal adjustment, there is some reason to think filings in 2012 might start edging up again,” he said.
The Chapter 7, or liquidation, filings seem to be receding more rapidly than the Chapter 13, or rehabilitation, filings most commonly associated with homeowners, Mann noted. For the second half of 2011, Chapter 7 filings were down 17 percent from the same period in 2010, while Chapter 13 filings were down 25 percent from the same period in 2010.
Nevada maintained its status as the state with the highest filing rate: There were 11,400 filings per million individuals, or about one in every 88 residents. Although Nevada filings fell almost 20 percent from last year, the state still has twice the national average.
The states with the next-highest rates are Georgia, Utah, and Tennessee, all with 9,500 to 10,000 filings per million adults; then California, with 8,300 filings per million adults. The only state with a substantial increase in filing from 2010 is Delaware, where filings increased 8 percent.
Two states with large populations fall at the low end of the spectrum: Texas, which had 2,700 filings per million adults, and New York, which had 3,130 filings per million adults, or just slightly more than half the national rate.
Reviewing the data on a regional basis, Mann noted that the decrease in filings in 2011 was spread throughout the nation, while in 2010, filings were still rising in the Southeast and the Pacific Southwest, while falling elsewhere.
Mann also analyzed filing rates in urban counties with an adult population of 250,000 or more. The urban county with the highest filing rate was Shelby, Tennessee, the home of Memphis; followed by Riverside, California, the home of Riverside; DeKalb, Georgia, the home of Atlanta; Clark, Nevada, the home of Las Vegas; and San Bernadino, California, the home of San Bernadino.
The urban counties with the lowest filing rates were, in descending order, those that are the home of Austin, Texas; Charleston, South Carolina; the District of Columbia; New York City; and McAllen, Texas.
Mann is Albert E. Cinelli Enterprise Professor of Law at the Law School.
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