Tuesday, July 3, 2012

Bankruptcies below 2009 levels during May 2012

Bankruptcy filings in Colorado fell to a three year low during May 2012 and were down 20.4 percent year over year in Colorado, falling from 2,845 filings during May 2011 to 2,264 filings during May 2012. According to new bankruptcy filing data, released by the U.S. District Court, monthly bankruptcy totals have been down year over year in Colorado for the past 16 months, with May's year-over-year decline being the largest drop since October 2006.

During 2012 through May, there have been 11,171 bankruptcy filings, which is down 14.5 percent from the 13,080 bankruptcy filings reported during 2011 through May.

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 nearly four 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). Bankruptcy filings totaled more than 43,000 during 2005.

The large spike in 2005 preceded the implementation of the new bankruptcy rules. Filings totals have now returned to the levels experienced during 2004 and 2009, and are down from both 2010 and 2011.

Note: April tends to be a peak month for bankruptcy filings as people use their tax refunds to pay for bankruptcy attorneys and filing costs.