Tuesday, June 4, 2013

Bankruptcy filings hit five-year low in April 2013 for Colorado

In Colorado during April, total bankruptcy cases filed fell 10.2 percent, year over year, to 2,270 cases. During April 2012, 2,528 cases were filed. April 2013 was the 27th month in a row in which bankruptcies declined year over year, following three years of growth from 2007 to 2009.

The first graph shows the year-over-year changes in bankruptcy case filings since January 2008:

In general, bankruptcy filings are about where they were during 2004, although they are up significantly since 2006 following the implementation of the 2005 Bankruptcy Act (discussed here). The second graph shows the 12-month moving average in bankruptcy filings, which helps remove seasonal issues in the numbers, and we can see that the trend is clearly down since 2011. As interest rates have been driven down by the central bank, and employment has stabilized, bankruptcy has become less common. Debt will likely become more expensive, or incomes will decline significantly, before we are likely to see a jump in total bankruptcy filings.

The last graph shows the bankruptcy filigns from month to month. There are obviously seasonal factors at work during the year, with bankruptcies peaking during March and April and declining throughout the rest of the year. Comparing April 2013 to previous Aprils, we see that April 2013 was a 5-year low for bankruptcy filings.