Bankruptcies increased in February, with total filings for last month increasing by 6% over January 2014's total. The total noncommercial filings for February also marked a 6% increase from January, but total commercial filings actually decreased last month by 3%, from 2,901 in January to 2,813 in February. Chapter 11 filings, however, notched the largest increase, jumping by 17% from 388 filings in January to 452 last month.
Despite the monthly uptick in filings, on a year-over-year basis, 2014's figures appear set to continue last year's decline. When compared to February 2013, total bankruptcy filings fell by 12% last month, while total commercial filings fell twice as steeply, with February 2014's total dropping by 24% from the number of cases filed in the same period last year. Total Chapter 11 filings also decreased by 27% in February 2014, down from the 619 Chapter 11 filings recorded in February 2013.
The same culprits that depressed filings in 2013 are expected to keep filings low this year as well. "Low interest rates, tighter lending standards and high costs to file continue to be reflected in fewer bankruptcy filings," said Samuel Gerdano, executive director of the American Bankruptcy Institute. "As these trends persist, expect bankruptcy filings to continue to decline in 2014."
On a per capita basis, the bankruptcy filing rate in February increase to 2.71 (total filings per 1,000 population), a slight increase from the 2.64 rate registered in January 2014. There were 2,578 average total cases filed per day in February 2014, marking a 12% decrease from the 2,942 total daily filings in February 2013. States with the highest per capital filing rates were Tennessee (6.02), Georgia (4.91), Alabama (4.82), Illinois (4.33) and Utah (4.06).
NACM's Credit Managers' Index (CMI) measures filings for bankruptcies as part of its index of unfavorable factors. In the most recent edition, the figure dropped from 60.5 to 58.5, a much steeper decline than expected, which signifies an increase in bankruptcy activity by respondents' customers and mirrors the month-to-month increase in filings between January and February. To learn more about the CMI, or to view the full February report, click here.
- Jacob Barron, CICP, NACM staff writer