Thursday, October 31, 2013

Colorado bankruptcy filings hit six-year low in September

In Colorado during September, total bankruptcy cases filed fell 20.7 percent, year over year, to 1,537 cases. During September 2012, 1,939 cases were filed. September 2013 was the 32nd 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 2003, 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 filings 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 September 2013 to previous September, we see that September 2013 was a 6-year low for bankruptcy filings.