Are bankruptcy filings decreasing in 2014?


I was reading an article that just came out on the ACA International website (Association of Credit and Collection Professionals) that showed that nationwide, bankruptcy filings in November were 16% lower than November of last year (2013).  This was show by comparing the 62,403 filings in November 2014 with the 74,070 in November of last year.

The article went on to quote the ABI Executive Director (American Bankruptcy Institute) who stated that:

“Bankruptcies will continue to recede amidst tepid consumer spending, sustained low interest rates and high costs to file for both consumers and businesses,” said ABI Executive Director Samuel J. Gerdano. “We are on pace this year for bankruptcies to be well under one million filings, the lowest total since 2007.”

In other words, this will be the lowest year of bankruptcy filings in the past 7 years.

I do have to disagree with the ABI on the reasons for less bankruptcy filings.  In my practice, I am seeing less people file bankruptcy because they are currently underemployed (working a part-time job that doesn’t quite pay the bills), living with family, and don’t have enough money to file bankruptcy.  I know, that seems like a contradiction, being too poor to file bankruptcy, but I see it over and over.  There is not a “high cost to file for both consumers and businesses.”  In fact, bankruptcy attorney’s fees (at least in chapter 7s), have dropped over the past 7 years or so.  It is simply the fact that people now can’t afford to scrape up the retainer and filing fee to get it done.