According to new statistical information just released by the American Bankruptcy Institute (ABI), and based on information compiled by Epiq Systems, Inc, 2013 saw bankruptcy filings total 1,032,326, which is a 13% decrease from the 1,186,137 cases filed in 2012. When further analyzed, there was a 12% decrease in the number of non-commercial filings, but a 24% decrease in the commercial filings (44,111 vs 57,964 filings).
According to the ABI, the 2013 filings were the lowest total since 2007, and the filings have been dropping annually since 2010. It is also predicted that the filings will continue to drop in 2014, due to the low interest rates and high legal and filing fees costs associated with filing for bankruptcy.
A curious effect of this is that the decrease in filings is having a significant impact on the bankruptcy court system itself, which is partially funded from the actual filing fees received when bankruptcy cases are filed. As filings decrease, so do the funds to run the court. While the actual number of cases has decreased, the courts report that their work has actually increased, due to more matters being litigated in the court, so we have a crisis of growing need coupled with fewer funds to pay for the court’s operations.
Finally, while the average national per capita bankruptcy filing rate for 2013 decreased to 3.33 per 1,000 population from 2012’s 3.83 rate, some states had significantly higher filing rates. The top five were Tennessee (6.59), Georgia (5.74), Alabama (5.65), Utah (5.16) and Indiana (5.00).
Michael B. Katz, Esq.
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