Bankruptcy Law Blog

Sunday, August 28, 2016

Bankruptcy Filings Increased in Alabama Over the Past Year Despite Decreasing Nationwide

The old saying “no news is good news” could basically be the mantra of all of us hoping that Alabama is finally starting to recover from the Great Recession of the last decade. The latest financial news is in fact, somewhat of a mixed bag. The Administrative Office of the U.S. Courts has just released its data on the number of bankruptcies filed over the past year, and Alabama has seen an increase while the country as a whole saw a decrease.

During the 12-month period ending June 30, 2016 (which is the end of the fiscal year), there were 26,124 bankruptcies filed in Alabama. This includes 331 business-related bankruptcies, and 26,124 non-business bankruptcies. The non-business bankruptcies are mostly personal bankruptcies, which means they were filed by an individual or family.

This is a 3.8% increase over the previous 12-month period (ending June 30, 2015), when the number of bankruptcies filed in Alabama totaled 25,175.

Now it is important to remember that bankruptcy filings aren’t necessarily a bad thing. A bankruptcy is of course a failure, but at the same time, it is a fresh start. Filing bankruptcy can allow a family to keep their house after medical expenses get out of control. A business bankruptcy can be the opportunity a company needs to restructure and get back to profitability. There is actually a lot of good that comes from bankruptcies. 

Each of the individual fresh-start stories that come from bankruptcy add up to a not-so-great picture on a larger scale. The fact that Alabama has seen an increase in bankruptcies while the country as a whole has seen a decrease is a bit alarming.

According to the U.S. Courts, “Bankruptcy filings fell 6.9 percent for the 12-month period ending June 30, 2016, compared with the year ending June 30, 2015… The June 2016 annual bankruptcy filings totaled 819,159, compared with 879,736 cases in the previous year.”

This, however, does not mean that the country as a whole is not also concerned about the number of bankruptcy filings. 

“The number of bankruptcy filings was the lowest for any 12-month period since the year ending December 2007. However, the rate of decline was less than 10 percent for the second straight quarter, after consecutive double-digit declines had occurred in every reporting period since December 2011.”

Hopefully the next reporting period brings better news for both Alabama and the country as a whole.

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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”

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