Arizona bankruptcy filings of new Chapter 7 liquidations, Chapter 11 reorganizations, and Chapter 13 repayment plans are down from a year ago in all three court locations – in Phoenix, Tucson, and Yuma.
I decided to take a look at the frequency of new bankruptcy filings in Phoenix, Arizona, to determine whether there are any notable trends worth reporting. The following statistics were compiled by the U.S. Bankruptcy Court, District of Arizona, and are accurate through September, marking the end of the third quarter.
Bankruptcy Filings in Phoenix – The First Nine Months
Most of the bankruptcies in Arizona are filed in Phoenix, which makes sense given that our city is the most populous in the state. According to the 2010 U.S. Census, the Phoenix-Mesa-Glendale metropolitan statistical area (MSA) ranks 14th in the nation with a population of 4,192,887 and growing. Furthermore, of those who filed with the Bankruptcy Clerk of the Court in Phoenix, most are residents of Maricopa County.
In Phoenix, the number of all filings from Jan. 1 – Sept. 30, 2012, fell from the same period in 2011, substantially so. For the first 9 months of the year, 20,854 cases were filed in 2011 compared to 15,944 in 2012. That represents a decline of 23.5% in new 2012 filings under all chapters (7,9,11,12,13, and 15).
Phoenix Chapter 7 Bankruptcy Filings – New Liquidations
As you can see, Chapter 7 liquidation bankruptcies account for the bulk of petitions filed in the District of Arizona.
For the same 9-month period, the number of Chapter 7 filings also declined substantially. In 2011 there were 17,592 new cases filed. In 2012 there were only 13,688 filed, representing a decline in Chapter 7 filings of 22.2%. The month with the sharpest decline occurred in January 2012, which plunged -29.8% from January 2011.
Phoenix Chapter 13 Bankruptcy Filings – New Repayment Plans
Chapter 13 repayment plans represent the second largest group of petitions filed in Arizona. In Phoenix, there were 2,991 petitions filed in the first 9 months of 2011 compared with 2,008 for the same period in 2012 – a whopping 32.9% decline!
Phoenix Chapter 11 Bankruptcy Filings – New Reorganizations
Chapter 11 reorganization bankruptcies make up the third group of new filings to discuss statistically. In 2011, January through September, there were 267 filings compared to 247 during the same period of 2012. Although not as substantial as the other two types of filings, this 7.5% decline in Chapter 11 filings is an important statistic to note.
What Do the Numbers Mean?
Individuals and businesses file for bankruptcy when they need federal court intervention to give them debt relief from creditors. Although all debtors’ circumstances differ and all have their unique sets of facts, each debtor has to qualify for the relief offered under the chapter. With an overall decline of 23.5%, clearly fewer people sought debt relief in the first 9 months of 2012 than did in 2011. Given how tough 2011 was for a lot of Arizonans, these statistics may be the best news yet to come out of the third quarter.
Phoenix Bankruptcy Resource: