Here’s some good news to start the week. Bankruptcies around the country took a nosedive in 2012, down 13 percent, the Administrative Office of the Courts reports Monday. Personal bankruptcy filings are down to a level not seen since the start of the economic meltdown in 2008.
Business bankruptcies, which hit a high of 60,800 in 2009 were down to 40,000 in 2012, even below the 2008 level of 43,500.
The majority of personal bankruptcies was 1.18 million in fiscal year 2012, down from 1.36 million a year earlier, off by 182,000, and far below the 2010 peak of 1.53 million.
The majority of filings are for Chapter 7 liquidation. The filings during calendar year 2012 hit 843,500, down15 percent from the prior year. While Chapter 11 reorganization fell 10 percent to 10,400 for the year.
California’s Los Angeles-based Central District and Sacramento-based Eastern Districts had the lion share of bankruptcies in the state. But again, the good news is they were down significantly from 2011 to 2012.
The Central District saw 134,500 total bankruptcies in 2011 but that fell to 105,500 for the 2012 calendar year. That’s a drop of 22 percent. And in the Eastern District where the Central Valley was hit hard by the home mortgage crisis, total bankruptcy filings were down from nearly 49,000 in 2011 to 36,700 in 2012. That’s off by 25 percent.
The only other state in the 9th Circuit that saw a larger drop in filings for the year was Nevada, with a decline of 27 percent. And everyone probably remembers that Nevada was at the center of the nation’s mortgage default crisis.
Public sector bankruptcies are so rare they don’t rate their own column in the statistics files, but a look at Chapter 9 filings shows California’s Eastern District with three is tied with Minnesota and Nebraska. There were only 20 such filings last year in the entire country.