Don't let other headlines fool you. On a daily basis, the bankruptcy filing rate rose in November and went over 5,000 for the first time since the 2005 changes to the U.S. bankruptcy law.
The 91,355 filings in November were a decline in absolute numbers from October, but spread over a month with only 18 business days, that's a daily filing rate of 5,075 and a 2.6% increase from October. If we don't count the day after Thanksgiving as a business day, the November filing rate represents an 8.6% over October. As always thanks to Automated Access to Court Electronic Records (AACER) for the data. The November daily filing rate of 5,075 is an increase of 36.9% over the same time period the year before. The short-term trend over the past few months is a big part of the increase. The November 2008 increase in the bankruptcy filing rate comes on the heels of increases in July (2%) August (2%) September (2%) and October (8%). Remember that even small monthly increases compound to large annual increases. For example, if bankruptcy filings rose 2% each month, that translated into a 29% annual increase. The tightness of credit and the overall economy are the reasons for the increases in the bankruptcy filing rate.
With only one month left in the year, it doesn't take advanced math to estimate total bankruptcy filings for the 2008 calendar year. We are just a few hundred bankruptcies short of 1,000,000 for the calendar year, and we can expect about 100,000 filings in December. For the record, however, in 2008 we will have:
- 1,095,000 filings if bankruptcy filings continue for the rest of the year at the same daily rate (4,347 per day) as they have averaged for the first eleven months of 2008
- 1,112,000 filings if bankruptcy filings continue at the same daily rate (5,075 per day) as they have averaged for November
- 1,086,000 filings if bankruptcy filings for the remaining month of 2008 constitute the same proportion of total filings as the last month of 2007 constituted for total filings that year (about 7.9%)
