Data out regarding recent bankruptcy filings is showing a continued downward trend as more consumers have dealt with their problem debt and the pipeline of new credit extensions remains unfilled.
The percentage of cases under a Chapter 13 bankruptcy have increased to about 30% of all consumer bankruptcy filings. This is the result of a decrease in Chapter 7 bankruptcy filings late in the year.
As you can see in the chart below, the number of Chapter 7 bankruptcy filings has spiked considerably following the last three post-holiday periods.
Since Chapter 7 filings are a less expensive way for consumers to deal with problem debt and it addresses the underlying financial problem rather quickly, it appears to be a logical expectation that post-holiday 2011 debtors may again fuel an early bankruptcy spike in 2012.
For those interested in parsing recently released bankruptcy data, the Harvard based Bankruptcy Data Project is an excellent resource.Consumer Bankruptcy Filings Trend Downwards but Expect Early 2012 Spike by Steve Rhode