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Miami, Chicago Launch New Year With High Level of Bankruptcy

February 19, 2013

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Florida's Miami-Dade County bucked the national trend in the first month of 2013 by posting an increase in the number of consumers filing for bankruptcy, according to a report from The Miami Herald.

And the recent experiences of consumers in other major metropolitan areas suggest that the recent dip in bankruptcy filings could only be a temporary phenomenon.

Sources say that Miami-Dade County ranked second in the country’s top counties for people filing for bankruptcy in January 2013.

According to a report compiled by Ronald Mann, a professor at Columbia Law School, Miami-Dade experienced 626 bankruptcy filings per million adults.

In his report, Mann noted that Miami-Dade was only topped by Chicago’s Cook County, which ranked first by a wide margin, with 691 bankruptcy filings per million adults.

Cook County is a very diverse geographical area, with pockets of residents occupying all levels of the socioeconomic strata, so it’s not much of a surprise that both wealthy and low-income people have filed for bankruptcy at a relatively high rate in Chicago this year.

Miami-Dad County is somewhat more homogenous, but it’s interesting to note that both Illinois and Florida were hit very hard in the recession that started a few years ago.

In the wake of the recession, many consumers dug in their heels and refused to open new lines of credit, but the slowly improving economy could be pushing people to take more financial risks, which can create higher bankruptcy rates.

Sources say Mann’s report supports this theory, as the number of filings in January 2013 were considerably higher than most experts anticipated.

According to Mann, "[c]oming on the heels of news of an economic contraction in the last quarter of 2012, bankruptcy filings in January were surprisingly high. The January filings raise a likelihood of worsening filings to come in 2013."

And while the odds of these filings happening in Miami or Chicago are fairly high, consumers in California should also be on their toes.

Sources note that the four counties that ranked behind Cook and Miami-Dade were Riverside, Los Angeles, San Diego, and Orange, all of which rest in The Golden State.


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