Boston bankruptcy rate down in 2011
Boston bankruptcy lawyer Neil Burns reports good news: the rate of personal bankruptcies was lower in the first half of 2011 than the first half of the prior year. According to the American Bankruptcy Institute statistics, personal bankruptcies were down about 8% for the first half of the year. The numbers are as follows: there were 709,303 personal bankruptcies filed between January 1 and June 30; this is down from 770,117 filed the previous year.
Personal bankruptcies were down in June 2011 verses June 2010; 119,768 filings in June this year and 126,270 filed one year earlier, in June 2010. This is a 5% decrease.
Further, ABI finds that during the month of May, personal bankruptcies were down 16% from May 2010; and, ABI reported in early May that bankruptcies were down 7% verses the prior year’s April.
Last year, 2010, when the Boston bankruptcy lawyer blog reported on the first half of the year’s statistics, unfortunately, bankruptcies were up 35%! Thus, this year’s news is a huge step in the right direction. Bankruptcy filings often correlate with fluctuations in unemployment, according to David Leibowitz, a bankruptcy lawyer in Chicago, and on the of the American Bankruptcy Institute’s consumer committee. We are not economists here, but the reduction in the rate in Boston bankruptcies seems to be a positive economic indicator.
At the end of the first quarter, the ABI found the following states to have the highest rate of personal bankruptcies: Nevada, Georgia, Tennessee, California, Indiana, Alabama, Utah, Michigan, Arizona and Colorado. Massachusetts, no where near the bottom of the list, enjoys an employment rate of 13th highest; and Massachusetts has the 13th highest Gross State Product according to the Bureau of Labor Statistics and the US Census Bureau. While there is room for improvement, Massachusetts consumer lawyers see these statistics as promising.
If you look at Massachusetts specifically, the first quarter results are published by the Massachusetts Bankruptcy Court. They indicate that there were 3,737 Chapter 7 filings in the first quarter of 2011. There were 1,097 Chapter 13 personal bankruptcy filings for that quarter, and 4,884 total filings, which include Chapter 11 (45) and Chapter 12 (5). The first quarter in 2010 resulted in 5,847 total filings in Massachusetts; with 23,618 for the year in 2010. Going back one more year, to 2009, the first quarter Massachusetts residents filed 4,567 total bankruptcies for the first quarter; there were 20,966 for the year 2009.
In 2008, the number was 2,973 in Massachusetts bankruptcies in the first quarter, with 16,538 for the year in 2008. In 2007 there were 13,705 total bankruptcies in Massachusetts, while in 2006 there were 8,400 Massachusetts bankruptcies. Note that in 2005 there were 26,714 bankruptcies: this was the year that the law changed and many folks filed in advance of the October 2005 deadline.
Excesses, like the $150 hamburger on Wall Street are being squeezed out of the system: in the notorious Wall Street Burger Shoppe Chapter 7 case, the 30 Wall Street bistro reported $50,000 in assets and $500,000 in debts. While we know this would never happen in Boston, the trend seems to be our friend.