August 6, 2012
By John Clark
The number of bankruptcy filings in Orange County, California - an important economic bellwether for the rest of the United States - has dropped to its lowest level since May 2009, according to a report from the Orange County Register.
Last month, 1,256 individuals and businesses in Orange County, one of the wealthiest areas in the country, filed for bankruptcy, according to data reported by the U.S. Bankruptcy Court's Central District Court of California.
And sources say that the number of bankruptcy filings, both personal and corporate, has been steadily declining since 2011, although the numbers from month to month tend to fluctuate.
Compared to June 2011, the number of filings in Orange County was down 22.5 percent this month, and sources note that this dip was a relatively small decline compared to the rest of the surrounding counties.
For example, San Bernardino county saw a 37.6 percent drop in bankruptcy filings compared to the same month last year, and Los Angeles County had a decline of almost 26 percent.
Of course, while Orange County’s bankruptcy filings took a dramatic drop this year, sources say that the overall numbers are still "extremely high" by historical standards. In June 2006, for example, there were only 355 filings in Orange County, which seems miniscule when compared to the 1,256 filings this month.
This fact reflects a broader trend among people filing for bankruptcy across the entire country. While overall figures remain at historically high levels, the rate of decline has picked up in recent months.
So, while more than a million people still sought personal bankruptcy protection last year, sources expect this figure to continue its steady decline in the short term.
Possible reasons for the decline in bankruptcies include a slowly improving job market, a modest uptick in the housing market, and steady growth in the economy as a whole.
Still, analysts believe that the bankruptcy figures will soon plateau at a sustainable number, because even in good times, large levels of debt can strike even the most financially responsible consumers.
And when debt strikes, consumers are often very grateful to have personal bankruptcy as a potential source for financial relief.
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