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Bankruptcy in North Carolina, Part 1

State has done better than U.S. overall, but rates nearly 10x since mid-80s


News article points out rise in Tar Heel bankruptcies during one judge's career

A recent article about a new bankruptcy judge in North Carolina contains a telling line about the increase in bankruptcy filings within the state since the era when the outgoing judge was seated. From a Nov. 26 piece in The Charlotte Observer:
For most of her legal career, Laura Beyer has been the law clerk for U.S. Bankruptcy Judge George Hodges.

Beyer is now taking over the bankruptcy judgeship in Charlotte held by her boss for more than two decades.

The 4th U.S. Circuit Court of Appeals in Richmond, Va., appointed Beyer to the judgeship for a 14-year term.

That's the news lede. However, this is the telling line [emphasis added]: "In 1986, the year before Hodges was appointed to the bankruptcy judgeship, 2,293 people and corporations filed bankruptcy petitions in North Carolina's Western District. More than 8,000 bankruptcies have been filed in the district each of the past two years."

Recent statistics: Bankruptcy filings, U.S. vs. N. Carolina

To get an idea of recent trends, let’s compare national rates of bankruptcy filings with the number of filings in North Carorlina, according to data from the U.S. Courts; all data are from the cited year, as of Sept. 30 [Note--due to slight annual variances, data are not exact totals from year to year]:

  • In 2007, U.S. filings were 801, 269; in 2008, 1,042,993, for an increase of 30.2 per cent. During that same period, N. Carolina residents fared better, recording in the–

    • Eastern District, in 2007 -- 7,703 filings; in 2008 -- 8.956 filings, an increase of 16.3 per cent

    • Middle District, in 2007 -- 5,907 filings; in 2008 -- 6,264 filings, an increase of 6.0 per cent

    • Western District, in 2007 -- 5,810 filings; in 2008 -- 6,386 filings, an increase of 9.9 per cent

  • By 2009, U.S. filings were up to 1,402,816, an increase of 34.5 percent over 2008; year to year in Ohio–

    • Eastern District filings rose to 11, 326, another rise from year to year filings, 26.5 per cent

    • Middle District filings rose to 7,432, again, a rise from the preceding year, 18.6 per cent

    • Western District filings increased to 8,159, a climb of of 27.7 per cent over 2008

  • By 2010, the U.S. saw 1,596,355 filings, another jump of 13.8 per cent, while those in N. Carolina began to drop, very slightly in two districts and a less severe  rise once more, in the Western District–

    • Eastern District filings fell in 2010, to 11,176, a drop of 1.3 per cent from the elevated levels of 2009

    • Middle District filings fell to 7,397, a slight decrease of 0.5 per cent

    • Western District filings rose once more, to 8,785, a climb of 7.7 per cent from 2009

  • By September '11, rates had fallen from the preceding year; in the U.S., 1,467,221 were filed, a decrease of 8 per cent from 2010; in N. Carolina:

    • Eastern District filings, down 7.9 per cent, to 10,288

    • Middle District filings, down 15.1 per cent, to 6,279

    • Western District filings, down 11.2 per cent, to 7,799

N. Carolina residents have fared better than many the in U.S.

Overall, then, Tar Heelers have been less distressed than the U.S. population as a whole, based on overall percentages. Nevertheless, nearly 25,000 bankruptcies had been filed in North Carolina as of Sept. 30. That's quite a rise since Judge Hodges began hearing cases.

Next, in Bankruptcy in North Carolina, Part 2: basic concepts and protections of consumer bankruptcy.

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