Nationwide Bankruptcy Filings Drop in May, Analysis by Professor Ronald Mann Shows

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Nationwide Bankruptcy Filings Drop in May, Analysis by Professor Ronald Mann Shows

Public Affairs, 212-854-2650, [email protected]
 
New York, June 2, 2011—Personal bankruptcy filings nationwide declined in May, the fifth straight month that filings were down compared to last year, according to an analysis by Columbia Law School Professor Ronald Mann.
 
There were 115,000 filings in May, compared to 135,000 in April, down more than 10 percent. The number also represents a 16 percent decline compared to May 2010.
 
“This is a trend that shows no immediate signs of abating,” said Mann, who performed the analysis for the National Bankruptcy Research Center. “It is especially remarkable when contrasted with the four years beginning in 2007, when every month’s filings were higher than the filing for the same month in the previous year.”
 
Year-to-date, Nevada has the highest population-adjusted filing rate of 5,176 filings per million adults, more than twice the national rate of 2,562 per million. Georgia (4,159), Utah (4,143) Tennessee (4,027), and California (3,739) round out the top five.
 
At the same time, Mann noted that while Nevada leads the nation in filings—and has done so by a wide margin all year—its filing rate is actually down 17 percent from the first five months of 2010. Another wrinkle is that, despite the subprime mortgage crisis that ravaged Nevada’s economy, the 23 percent of its filings under Chapter 13 of the bankruptcy code trails the national average of 28 percent.
 
Under Chapter 13, debtors often can keep all of their property under a court-approved repayment plan. In other forms of bankruptcy, such as Chapter 7, debts are canceled, but the debtor will often have to surrender property to pay creditors.
 
“Whatever Nevada filers are doing they are not in bankruptcy to save their homes,” Mann said.
 
The District of Columbia, with 819 filings per million, has the nation’s lowest filing rate this year, followed by Alaska (853) South Carolina (1,015), Vermont (1,060), and North Dakota (1,116).
 
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