It was reported today that the number of those filing bankruptcy in the U.S. Bankruptcy Court of Ohio were 14% lower than the number of those filing in the first eight months of 2010. It was also reported that nationally the decrease of those filing bankruptcy was 10% according to the American Bankruptcy Institute.
In a normal world, this would be outstanding news that the economy has possibly turned the corner and now less people needed to file for bankruptcy. When looking at the economic data for the country, unemployment continues to stay above 9.2% and the economy is not growing at a noticeable rate.
After discussing the matter with a bankruptcy attorney everyone seems to be perplexed. Some ideas kicked around are the number of Americans in foreclosure has dropped also. Many Americans file for bankruptcy in an attempt to stop foreclosure and with the foreclosure numbers down, the need for a bankruptcy filing is down also.
Another theory is, that the big banks have a large number of homes in defaults or close to it and are slow to push them towards foreclosure. Many people believe they don’t want a large number of foreclosures on their books and they don’t want to further deflate the real estate market. If the banks aren’t pushing for foreclosure, the debtors will hold off on filing bankruptcy also.
Who knows what the reason is, it might even be that the underwater debtors had been able to get access to more credit to kick the can further down the road. No one knows what’s happening here but it doesn’t make any sense. Could this be the calm before the storm? Only time will tell if 2012 will be another banner year for the bankruptcy attorney as people move back towards filing bankruptcy.