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National and Illinois Personal Bankruptcy Filings Down for First Half of Year

Recent reports from the National Bankruptcy Research Center and the American Bankruptcy Institute may show a glimmer of hope for the faltering U.S. economy. According to the newly released numbers, consumer bankruptcy filings for the first six months of 2011 have declined significantly since the same period in 2010. The fact that filings in June 2011 also dropped noticeably when compared with June 2010 reinforces the possibility that the economy may be starting to make a serious rebound.

The Numbers

During the first six months of 2011, there were 709,303 consumer bankruptcy filings in the United States. That number is 7.9 percent lower than the same number from 2010. It also indicates that in 2011 the U.S. may have less than the 1.5 million filings that occurred in 2010, which was the largest amount of filings since 2005, when stricter bankruptcy laws appeared on the books.

Additional Data

Another telling sign is the fact that filings in June of 2011 dropped noticeably when compared with the same period in 2010. There were 119,768 personal bankruptcy filings in June 2011; in June 2010, there were 126,270. Considering the fact that filings were expected to rise in 2011, this is especially significant news.

Hope for the Future?

The decline in bankruptcy filings can be partially attributed to two things: the ongoing pullback in consumer credit and the efforts of individual consumers to reduce household debt.

The news is promising, but it doesn't apply to the country as a whole. California, for example, has seen no significant changes in the number of bankruptcy filings that occur there. Although it has the highest bankruptcy filing rate in the country, Nevada has still enjoyed a 16 percent drop. The decline in bankruptcy filings was most significant in North Dakota, Vermont, Washington, D.C. and West Virginia.

Illinois also experienced a significant 8.8 percent decline, beating the national average. Last year there were 41,036 personal bankruptcy filings through June, and this year there were only 37,437.

Source: Consumer bankruptcies decrease in first half of 2011

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