If Americans use bankruptcy filings as an indicator of how the economy is faring, then there is a brighter economical future for the United States in 2012. Bankruptcy filings steadily fell across the board in the United States in 2011 and may be effecting its economy. That might be an indicator for bankruptcies and a brighter future in 2012.
2011 National Bankruptcy Statistics
According to the American Bankruptcy Institute, bankruptcies fell 12 percent in 2011 compared to 2010. There were 1.38 million United States filers in 2011, including about 74,000 commercial filings. The rest of the filers were individual consumer filings.
A couple of the more notable states with declining bankruptcies for 2011 include Hawaii and Arizona.
Hawaii 2011 Bankruptcy Statistics
In Hawaii, bankruptcy filings fell for the first time in five years, coming from double digit increases every year since 2007. U.S. Bankruptcy Court statistics showed there were 3,325 cases filed in Hawaii during 2011, down 15.9 percent from 2010. According to the TransUnion Credit reporting agency, credit card debt also declined from a high of $6,000 per card holder in 2009 to $4,800 per card holder in 2011 economy. Credit card debt is an indicator for potential bankruptcy within the economy.
Arizona 2011 Bankruptcy Statistics
In the state of Arizona, bankruptcy filings also dramatically declined, especially in the heavily populated metropolis of Phoenix. According to an American Bankruptcy Institute news article, there were “1,577 new bankruptcy cases in December, down 33.1 percent from December 2010 and the smallest total since February of 2009. For the Year in Phoenix, bankruptcies eased to 26,252 bankruptcies, down 15.9 percent from 2010.”
All of Arizona filings were down in December by 30.6 percent from 2010, and the filings were down 15.6 for the full year of 2011 compared to 2010.
Possible Reasons for the Decline in Bankruptcies
Hawaii’s and Arizona’s state bankruptcy statistics are examples of what is happening in most places across the United States concerning bankruptcies. The given reasons for this decline are myriad.
The reasons for bankruptcy filings decline can range anywhere from most of the bankrupt have already gone through the bankruptcy system to debtors not being able to pay their lawyers. Some speculate that debtors are selecting to hold onto their credit ratings as long as they can by trying debt settlement, while others speculate that money has tightened, and it is harder to obtain credit. Some even suggest the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has added too much in cost for filing, thus deterring potential filers.
Bankruptcies and a Brighter Future
While all of these speculations have some merit, there is merit in the belief that things economically in the United States is slowly beginning to turn around. Bankruptcy’s brighter future for 2012 may include less bankruptcies because the economy is getting better. Jobs are slowly beginning to increase, the housing market is slowly beginning to get better. All of these are signs of potential better times economically for the United States.
There will still be a significant number of bankruptcies filed in 2012, but there will always be a significant number of bankruptcies filed as long as the United States remains a free market capitalistic system. Bankruptcy filings enable the continuation of a healthy market place. Under bankruptcy, poor financial transactions end, and new financial transactions begin fresh, just like the new year.
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