March Bankruptcy Filings Highest In Years
The statistics are in and they are not good. Bankruptcy filings were at there highest levels in years. The figures reveal the Great Recession is not exactly over.
Individuals and businesses are filing bankruptcy at alarming rates. How alarming? They haven’t been this high since we saw the inflated numbers of 2005. 2005 was the year that the bankruptcy laws were changed and it came more difficult to discharge debts. Given the change, millions filed just before the deadline so they could get rid of their debts under the old rules.
So, what did we see in March? There were just over 158,000 bankruptcies filed in March of 2010. That figure represents an increase of 20 percent over the number of bankruptcy filings in March of 2009. It is also a 35 percent increase over February 2010, which tends to indicate that the rate of bankruptcy filings is increasing as we move deeper into 2010. The number is also 20,000 filings more than the previous largest month excluding the 2005 figures – a whopping 133,000 in October of 2009.
So, what can we take from these statistics. Well, the first thing to understand is there is a bit of a delay between bad economic news and the fallout. That being said, there is little doubt these numbers are very troubling. They seem to reflect the fact that the recovery from the Great Recession may be technically underway, but it is a very weak recover. Given the fact we have fallen so low, it is not enough for the economy to stabilize. We need to see it power back up so we can get things humming again.
The economic recovery we are starting to see in 2010 may be a unique moment for our society. It appears as though a fundamental change may have occurred. Millions of jobs have been lost. One would expect them to be coming back, but they don’t seem to be. This is particularly true for many blue collar jobs. How this all plays out is going to be a bit of a mystery, but the increase in bankruptcy filings tells us a very different story than what those touting a recovery are saying.
That is very worrying.