RAND State Statistics recently updated its Bankruptcy and Bankruptcy database from 1996 to the fourth quarter (Q4) of 2021, reporting the number of bankruptcies by type (i.e., chapter of the bankruptcy code) and the rate per 1,000 population. Here are some highlights.

There were 473,349 total (personal and business) U.S. bankruptcies in the first quarter of 2021, decreasing 5.8% to 445,954 in the fourth quarter. From the first quarter of 2020 to the fourth quarter of 2021, total U.S bankruptcies fell even more drastically from 764,282 to 445,954, a decrease of 41.7%, (See Figure 1).

Figure 1—U.S. Bankruptcy Filings, Q1 2020 - Q4 2021

Over a longer period of time, from Q1 of 2012 to Q4 of 2021, total US bankruptcies fell 67.3%, dropping from 1,365,452 in 2012 to 445,954 (See Table 1). Table 1 also shows the long-term decline in total bankruptcy filings since the height of the Great Recession. In rough terms, the current annual rate is a third of that observed in 2009-2011.

Table 1—U.S. Bankruptcy Filings, Q1 2012 - Q4 2021

From 1996 to 2021, total US bankruptcies decreased 54.4%, falling from 978,871 in Q1 of 1996 to 445,954 in Q4 of 2021 (See Figure 2).

Figure 2—U.S. Bankruptcy Filings, Q1 1996 - Q4 2021

Figure 3 shows the states with the lowest and highest rates of total bankruptcy filings in Q4 of 2021 and their progression from Q1 of 1996.  Rates, expressed as filings per 1,000 persons, were the lowest in Alaska (0.3), Vermont (0.4), The District of Columbia (0.4), New Hampshire (0.5), and Massachusetts (0.5). The states with the highest rates of total bankruptcy filings per 1,000 persons over this twenty-five year period were Alabama (3), Nevada (2.2), Tennessee (2.2), Indiana (2.1), and Mississippi (2.1).

Figure 3—U.S. Bankruptcy Filings Per 1,000 Persons, 1996 - 2021

To compare the U.S. Bankruptcy Filings Per 1,000 Persons from 1996 to 2021, see Figure 4 and Figure 5.

Figure 4— U.S. Bankruptcy Filings Per 1,000 Persons, Q1, 1996

Figure 5—U.S. Bankruptcy Filings Per 1,000 Persons, Q4, 2021