Friday, September 16, 2011

Bankruptcies in Colorado down 7.6 percent in August

In Colorado during August, total bankruptcy cases filed fell 7.6 percent, year over year, to 2,663 cases. 83 percent of the cases were Chapter 7, and 16 percent were Chapter 13. During August 2010, 2,883 cases were filed. August was the seventh month in a row in which bankruptcies declined year over year.

The first graph shows the year-over-year changes in bankruptcy case filings since January 2007:

The appearance of sustained declines in the year-over-year comparisons reinforces the likelihood that consumers are beginning to get a handle on debts now that more than three years have passed since the beginning of the national 2007-2009 recession.

In general, however, bankruptcy filings have grown since 2006 following the implementation of the 2005 Bankruptcy Act (discussed here).

The large spike in 2005 preceded the implementation of the new bankruptcy rules. Filings totals have now returned to the levels experienced just prior to the final run-up in cases in 2005.

Recent monthly bankruptcy totals are now on a level similar to what was experienced during May 2004 and 2005, during a non-recessionary period. Foreclosures increased from July to August. In recent years there has been no clear season patters of foreclosure activity from July to August. April tends to be a peak month for bankruptcy filings as people use their tax refunds to pay for bankruptcy attorneys and filing costs.