The total federal bankruptcy filings jumped up by 30 percent for the 12-month period ending Sept. 30, with business filings climbing by 49 percent in the same period, according to the Administrative Office of the U.S. Courts.
The annual figures released on Monday may not bode well for the coming year, with the fourth quarter numbers showing a 34 percent rise in that quarter alone, according to the report.
Individuals seeking bankruptcy protection represent the bulk of filings, with a total of 1.043 million for the fiscal year ending Sept. 30, up from 801,000 in the same time for 2007.
Business filings grew to nearly 38,700 for the fiscal year just ended, up from nearly 26,000 for 2007.
The report shows that the most severe cases, liquidations under Chapter 7, were up by 40 percent from fiscal year 2007, while Chapter 11 reorganizations rose by 49 percent. Only Chapter 12, designed to protect family farmers, was down -- by 8 percent for the year.
The numbers show some of the hardest-hit areas on a per capita basis were Tennessee, with 7.3 filings per 100,000 population; Nevada, with 6.4; Georgia, with 6.0; Alabama, with 5.9; and Indiana, with 5.89.
When looking at liquidation filings alone, Nevada jumps to No. 1, followed by Indiana, Michigan, Kentucky and Colorado.
Broken down regionally, by circuit courts, the western states of the 9th U.S. Circuit Court of Appeals saw the biggest percentage gain, up by nearly 69 percent from 113,541 filings in 2007 to 191,595 in 2008, according to the records. Within the circuit, California's Central Valley, Los Angeles and the state's northern regions were hardest hit, followed by Nevada.
The Central District of California, covering the Los Angeles area, saw a 96 percent rise in filings, from roughly 29,000 in 2007 to 57,000 in 2008. The Eastern District, in the Central Valley, with heavy home foreclosures, saw an 83 percent rise and the Northern District saw a 69 percent jump. Nevada showed a 77 percent increase, according to the report.
The smallest increase came in the 5th Circuit, up by 6 percent, with the bulk of the increases coming in Louisiana and Mississippi, still recovering from Hurricane Katrina.
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Federal Bankruptcy Filings Surge by 30 Percent; Business Filings Up by 49 Percent
The National Law Journal
December 17, 2008
