Bankruptcy filings continue to fall

February 27, 2014

empty pockets image: bankruptcy or debt settlement?The U.S. Bankruptcy Courts released their Report for 2013, and it shows that total filings are continuing to go down.

In fact, from 2009 through 2013, filings are down a Net 29%.

For example, total filings in 2009 were 1,593,081, as compared to 2013 when total filings were just above the one (1) million mark.

Although filings went up 8.1% in 2010, they went down 37.1% from 2011 thru 2013, or a net decline of 29%.


Not surprising, and based on the declining numbers for total filings, all of the Chapter filings are down.  Chapter 11 filings have been hit the hardest, and Chapter 13 filings the least.  Specifically Chapter filings were down as follows:

2009-2011 2012-2013
Chapter 7 Down 30.6% Down 13.6%
Chapter 11 Down 40.9% Down 13.3%
Chapter 12 Down 27.4% Down 22.9%
Chapter 13 Down 18.0% Down 8.97%


These declining percentages support the argument that demand for bankruptcy expertise is not as strong as a few years ago.  Perhaps increasing the size of your firm’s bankruptcy department is not a good idea right now.


A detailed analysis of the Bankruptcy filing statistics is beyond the scope of this brief article.

However, for anyone wanting to dig deeper, a good place to start is a Report published in September, 2011, by the Institute for Financial Literacy, Inc. The caption of the Report is “2010 Annual Consumer Bankruptcy Demographics Report: A five Year Perspective of the American Debtor” and can be obtained online at

Unfortunately, the Institute is not presently planning to prepare any similar reports for years after 2010.

The Report reveals that the five (5) top reasons for financial distress by Debtors in the sample group who filed Bankruptcy in 2010, were:

  1. Over-extension of credit
  2. Reduction of income
  3. Unexpected expenses
  4. Job loss
  5. Illness/injury

I suspect that the reasons for financial distress in 2010 are just as applicable today, and that job losses suffered by so many in recent years can cause the other consequences that are listed.


As in past years, the 9th Circuit had the highest total filings in 2013 of all the Circuits. However, its filings represented a 22.9% drop from the filings in 2012.

The 11th Circuit came in second for 2013, but even it had a 7.5% drop from 2012.

And coming in 3rd was the 6th Circuit, no doubt driven by the upheaval in the auto industry.  Like the others, the total filings in 2013 dropped 8.4% compared to 2012.