The ABI (American Bankruptcy Institute) announced a 24 percent drop in the amount of businesses filing for bankruptcy. Combining individual and business bankruptcies, the percentage of bankruptcies fell approximately 13 percent since the year 2006. The fall in the bankruptcy rate is a positive sign for the economy as many businesses are able to withstand the economic drought. The number of bankruptcy filings also fell approximately 1.03 million for the year 2013 when compared to 1.19 million in the year 2012. Overall, the number of bankruptcy filings fell in every state in the U.S. Unfortunately, the number of filings rose approximately 7 percent in the country of Puerto Rico due to a continued recession.
Over the past 5 years, the average number of bankruptcy filings for individuals and businesses fell about 1.32 million every single year. The low level in the number of bankruptcies was ultimately due to a law which was passed in 2005 and made it extremely difficult for individuals and businesses to file for a bankruptcy. Before the law was ultimately enacted, the average filings per year were approximately 1.5 million for the past decade.
Even though bankruptcy filings increased during the recession that took place in 2007, the number has fallen as the Federal Reserve was borrowing at a much lower rate than usual. The total number of bankruptcy filings was approximately 44,111 for 2013 which is down from 58,000 in the year 2012. Los Angeles had the largest amount of bankruptcy filings from 2010 to 2012. The state of Delaware held the record for bankruptcy filings for the year 2013. An investment banker conducted a future analysis for the year 2014 and predicts healthcare Companies will suffer due to regulation changes.
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