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There were 764,282 total (personal and business) U.S. bankruptcies in the first quarter of 2020, decreasing to 682,363 (-10.7%) in the second quarter (Figure 1). The reasons behind this decrease are unclear, especially with the economic impacts of the current pandemic. This decrease in Q2 of 2020 is particularly interesting given the rather consistent number of filings in 2019.
Figure 1—U.S. Bankruptcy Filings, Q1 2019-Q2 2020
Table 1 indicates the long-term decline in total bankruptcy filings since the height of the Great Recession. In rough terms, the current annual rate is half that observed in 2009-2011.
Table 1—Total U.S. Bankruptcy Filings, 2006-2020
Figure 2 shows the states with the lowest rates of total bankruptcy filings in the second quarter of 2020. Rates, expressed as filings per 1,000 persons, were the lowest in Alaska (.5%), Vermont (.8%), and Maine (1.0%). In contrast, the highest bankruptcy rates were concentrated in the South, in Alabama (5.2%), Tennessee (4.4%), and Mississippi (4.0%) (Figure 3).
Figure 2—States With Lowest Bankruptcy Rates, Q2 2020
Figure 3—States With Highest Bankruptcy Rates, Q2 2020
Not surprisingly, counties with the highest number of filings in Q2 2020 are heavily concentrated in the South (Figure 4). The county with the highest number of filings was Lowndes County, Alabama, (11.3%), Butler County, Alabama, (9.4%), and Crenshaw County, Alabama, (8.4%).
Figure 4—Counties with Highest Bankruptcy Rates, Q2 2020
Of interest, the number of business bankruptcy filings in Q2 of 2019, 22,482, was almost identical to Q2 of 2020, 22,483. Rates in most states were essentially unchanged, however, when measuring Q2 of 2019 to Q2 of 2020, Texas increased 8.1% from 2,195 to 2,374; Mississippi increased 26.6% from 199 to 252, and Massachusetts increased 8.7% from 300 to 326. Conversely, Connecticut decreased 21.4% from 201 to 158; Michigan decreased 15.2% from 512 to 434, and Rhode Island decreased 36.8% from 68 to 43. When the third quarter 2020 data becomes available in September it will be interesting to see if the Coronavirus crisis has caused an increase in the number of filings.