If you have followed me this far–and it’s understandable if you haven’t–you might be curious to know what ultimately came of LoPucki’s Big-Bankruptcy Empirical Research Conference, which I “live-blogged” (is that a verb?) yesterday.
The short answer: It’s all about jack-knifing and pencils in Zimbabwe.
Background: Nothing gets academics’ dander up like debates about methodology. For legal academics, this often breaks into two related clashes. (1) Whether to be an “empiricist” or not; and (2) if so, how to do it.
The folks at LoPucki’s conference mostly drink the empiricism Kool Aid, so answer the first question “yes.” After all, they included some of the nation’s leading business bankruptcy empiricists, among others Ken Ayotte (Northwestern), Joe Doherty (UCLA), Ted Eisenberg (Cornell), Bob Lawless (Illinois), Adam Levitin (Georgetown), Steve Lubben (Seton Hall), Ed Morrison (Columbia), Bill Whitford (Wisconsin), Sarah Woo (NYU) and, of course, LoPucki himself.
Rather, the real knife fight was over how to do this work. Must it only be quantitative (and guided by a scientifically legitimate—falsifiable—hypothesis)? Or could (should) it also include (arguably less rigorous) qualitative methods? Does it have to be social science? Or is “good enough for law” good enough?
This may sound like mere wonkage. But it matters for two reasons.
Still at UCLA.
Regardless of how you define chapter 11 success, selecting the information that should compose a chapter 11 database to help you figure out what works (and what doesn’t) is often a much trickier problem than you might think. Consider, for example, the simplest question: what is a “turnaround manager?”
It’s a question you might want to be able to answer, because you might think that they do (or do not) make success (however defined) more likely. The services of the ZolfoCoopers and Alvarez and Marsals of the world don’t come cheap. If they aren’t improving outcomes, maybe they aren’t worth the price.
Yet, we know that the ZolfoCoopers and Marsals are not the only turnaround managers. For example, LoPucki observed that many companies in trouble may simply let senior management go, and “promote some subordinate lackey who is declared to be a turnaround expert.” Is that person a “turnaround manager”?
For those few who don’t know, the Bankruptcy Research Database is one of the most important tools available to scholars and practitioners interested in understanding patterns in chapter 11 cases. It captures a great deal of information about essentially every large public company that has commenced a chapter 11 case under the current Bankruptcy Code.
The holy grail of all bankruptcy scholarship is figuring out whether a case was successful. Conventional wisdom might say that confirming a chapter 11 plan—and paying the professionals in full—is good enough.
But, we know that many companies file again, despite having confirmed a plan, and that may not necessarily be evidence that the plan was a failure: circumstances change, etc. Conversely, the confirmed plan may, in hindsight, prove much worse than other possible deals: Perhaps a 363 sale would have produced greater recoveries for creditors.
In January, households and businesses filed bankruptcies at the rate of 5,090 per day. The last time the daily bankruptcy filing rate was this low was January 2009. Monthly bankruptcy filings are sensitive to the number of business days in a month, making the daily filing rate a more meaningful figure than the absolute level of filings.
The January 2011 daily filing rate represented a 2.2% decline from December and a 5.9% decline on a year-over-year basis from January 2010. The January dip should not be overstated. The months of December and January historically are low filing months. Nevertheless, the January decline is keeping with the longer term trend of a declining bankruptcy filing rate and a long-term forecast that total bankruptcy filings will decline slightly in 2011.
And, before anyone runs around claiming that a declining bankruptcy rate is a sign of the economic recovery to come, be sure to read this post explaining why that is not necessarily so. As always, thanks for Epiq Systems for the data behind this post.
I like NPR’s Marketplace, but stories like this drive me nuts: “Why bankruptcy claims aren’t as high as one would think.” The story repeats a premise I often hear in media calls that I receive. The conversation usually starts something like this: “Foreclosures are up, unemployment is high, the economy is a wreck: why have bankruptcies stopped climbing?”
Wrong question. But fair enough. I get called because I am supposed to know something about bankruptcy filing rates, and my caller often has just picked up the assignment for the day. If that is the wrong question, what should we be taking away from trends in bankruptcy filing rates?
The daily bankruptcy filing rate dropped 7.3% in December, coming on the heels of a 13.3% drop in November. Overall, there were about 114,700 filings in December according to data provided by Epiq Systems. On a year-over-year basis, December 2010 was a 2.1% decline from December 2009.
That projection is based on a fairly simple model that uses monthly data from 2006 – 2010 on bankruptcy filings (again thanks to Epiq Systems for providing those data) as well as government data on revolving consumer credit (e.g,, credit card debt), nonrevolving consumer credit (e.g., car loans), and the unemployment rate. The model also accounts for cyclical monthly effects–bankruptcy fiings often spike in February and March and decline in November and December–as well as fixed effects from the The graph to the right shows the model’s results. The solid black line shows the actual bankruptcy filings for 2010 through November. The dotted red line shows what the model would have predicted for 2010 while the solid red line shows the model’s projections for 2011.
The bankruptcy filing rate fell sharply in November, declining 13.4% to a daily rate of slightly over 5,600 per day. On a year-over-year basis, November filings were down 2.7% from November 2009. The total number of filings in November — 118,000 — was spread over more business days making the daily filing rate decline greater than the decline in the total number of monthly filings reported elsewhere. Because the number of monthly bankruptcy filings is sensitive to the number of business days in a month, the daily filing rate is a more meaningful figure.
One of the many wonderful things about university teaching is that you get to hang around lots of smart people who tell you lots of interesting things. One of my students, David Henken, pointed out to me a very interesting pattern that comes from Google Insights for Search. People use Google to search for the word “bankruptcy” much more often during the week than the weekend. Does this pattern tell us something about how people think about bankruptcy? Perhaps.
Compared to the weekly pattern for other search terms, “bankruptcy” seems to have its own rhythm. This includes a search I did for “Justin Bieber,” perhaps the most useful Bieber-related search that has ever occurred. And, yes, my invocation of Justin Bieber is largely motivated by a shameless attempt to increase blog readership among girls aged 10-14, especially those living at Casa Lawless.
The bankruptcy filing statistics for September have displayed their usual sideways move during the summer. Since May, each month’s filing rates have moved up or down. Overall, however, bankruptcy filing rates, while somewhat lower, are approximately where they were at the beginning of the summer.
September’s total daily bankruptcy filing rate was 6,380, a monthly increase of 3.5% that comes after a monthly decline of 3.9% in August. For comparison, bankruptcy filings spiked higher than usual in March 2010, making April a better reference. In April, the daily bankruptcy filing rate was 6,650. For the past twelve months, the average daily filing rate has been 6,220.
Bankruptcy filings have not risen at anything like the rate at which consumer debt defaults have risen since 2007. Part of the explanation may lie in the shadow bankruptcy system, a network of alternative service providers who purport to save debt-burdened consumers from the bankruptcy court. While consumers being sued on delinquent credit cards and mortgages receive solicitations in the mail from bankruptcy attorneys, they are also deluged with a variety of other offers of aid. These range from foreclosure rescue scams to a wide range of legitimate and dubious debt advice and counseling services, to debt elimination and debt settlement schemes. While pondering this post I searched in the usual places for any good empirical data on the number of consumers participating in non-profit counseling, or the number of customers enticed by those who promise to make debt disappear, with no success. We don’t seem to know how many debtors go to these debt advice services.
Tara Siegel Bernard has a post up over at the New York Times Bucks blog about economic indicators, outstanding credit, and bankruptcy filings. She quoted some guy named “Lawless” who really sounds like he knows what he is talking about–probably a good-looking guy too. Punch line — less credit means fewer bankruptcies all other things being equal (which they rarely are).
A few weeks ago, I pulled a national random sample of chapter 7 and chapter 13 cases filed by individuals during July and August of 2010. I kept track of how many were filed by pro se debtors, that is people who were not represented by an attorney as indicated by the docket sheet. The figure was 11.3% or a little more than one out of every nine cases (n = 672). Interestingly, the pro se rate was higher in chapter 13 (13.8%) than it was in chapter 7 (10.1%), but the difference was not statistically significant (p = 0.167).
The fact that one of every nine debtors files bankruptcy without an attorney will probably strike some people as high, but keep in mind this is just a national average. From talking with court clerks and bankruptcy judges, I understand some jurisdictions may have a pro se rate as high as 30%. Pro se debtors can impose extra costs on the bankruptcy system as they try to navigate the maze of forms and proceedings. Also, with a very complex law like the Bankruptcy Code that was only made more complex in 2005, it is likely that unrepresented debtors are not achieving as good results in bankruptcy as those who are able to afford attorneys.
Many thanks to Bob for the invitation to guest blog here. Those who follow Bob’s postings on bankruptcy filing numbers will have seen that U.S. consumer bankruptcy filings have been plodding upwards steadily, but only to roughly where they were before the BAPCPA bubble back in 2005. One of the inscrutable mysteries of the financial crisis of 2007-??, which is after all a housing and consumer debt crisis, has been how few bankruptcies have been filed. Somehow, historically unprecedented levels of consumer debt and loan defaults have not produced the surge in bankruptcy filings one would expect.
The folks at Automated Access to Court Electronic Records (AACER) sent over the July bankruptcy figures. Total U.S. bankruptcy filings in July (134,600) were about the same as they were in June (133,900). There was extra business day in July, however, meaning that the daily filing rate, rose 5.3% to 6,408. The year-over-year increase in the daily filing rate was 7.7%.
Regular readers know that I am skeptical of reading very much into the ups and downs of the monthly filing rate. If you had looked at the June fiing rate, you would have seen an 8.9% drop in daily bankruptcy filings and perhaps concluded the economy was beginning to turn around. The July increase might lead you to the opposite conclusion. The most informative analysis comes from taking a longer term look at the data. And, there is my usual caveat that bankruptcy filings are, at best, a weak and trailing indicator of overall economic strength.
The Admistrative Office of the US Courts (AO) has released updated data on bankruptcy filings. While the AO data as some problems, as Bob Lawless has pointed out, I am pleased that they seem to have improved the accessibility of the data. For example, there is now an interactive map by state that is sort of fun (well, fun in my world).
One nice thing is the statistics on net scheduled debt. Given the way that some people seize on the dollars of debt in bankruptcy as a marker of the system, I like how the AO has deducted nondischargeable debt from the total debt listed by the debtor. To do otherwise, gives a misleading picture of how much “help” people get from bankruptcy. But additional caution is still needed. For the chapter 13 filers, about 2 in 3 of these people will not get a discharge of any unsecured debts because they will not complete the repayment plan. Much more importantly, these figures are total debt, the bulk of which will be mortgage and auto debt, which debtors must pay if they want to keep their homes and cars.
All in all, a better use of your time might be the interactive maps at the NY Fed. These have been upgraded recently to show delinquencies on auto loans, bank cards, mortgages, and even student loans. Check them out here.
Hat tip to former Credit Slips guest blogger, John Rao, for bringing the AO data to my attention.
The U.S. daily bankruptcy filing rate dropped in June by 8.9%, the second-largest monthly drop since 2006. Although bankrupt debtors filed approximately the same number of cases in June as May (about 133,000 – 134,000), there were two more business days in June meaning the daily filing rate actually declined. On a year-over-year basis, June 2010 was a 6.6% increase from June 2009, but this is the lowest year-over-year increase since the wave of cases from the 2005 changes to the bankruptcy law worked their way through the system.
These latest data provide the strongest evidence yet that the U.S. bankruptcy filing rate may be leveling off after nearly five straight years of steady increases. As always, many thanks to Automated Access to Court Electronic Records (AACER) for providing the latest statistics.
According to Automated Access to Court Electronic Records (AACER), the U.S. daily bankruptcy filing rate for May was 6,672, which was virtually identical to the rate from April. On a year-over-year basis, the May filing rate increase was only 10.5%. As regular Credit Slips readers know, the year-over-year increase has been declining for some time. A year-over-year increase of 10.5% is small compared to recent history. For example, in May 2009 there was a 41.4% year-over-year increase in the daily bankruptcy filing rate.
For the past five years, the story of the bankruptcy filing rate has been a steady increase, but that story might be changing. Even after adjusting for changes in population (see the graph to the right). U.S. Bankruptcy filings are at the level they were before the 2005 changes to the bankruptcy law, suggesting they might be nearing their “natural” rate. Of course, there is no true “natural” rate of bankruptcy filings, but what I mean by that is that the bankruptcy filing rate may be nearing its limit given the amount of consumer debt that exists. Unless there more consumer debt is injected into the system, bankruptcy filings will have to stop rising. And, consumer debt actually has been steady to falling. None of this is to be sanguine about the number of bankruptcy filings, we are on target to get around 1.65 million bankruptcy filings in 2010.
In March, the Executive Office of the U.S. Trustee (EOUST) released its annual report on audits of individual chapter 7 and chapter 13 cases. The audits identified a “material misstatement” in 22% of the cases examined for fiscal year (FY) 2009. The 2005 changes to the bankruptcy law require these audits and the EOUST annual report. The “material misstatement” rate for FY 2009 is similar to previous reports–21% in FY 2008 and 30% in FY 2007. The rate of “material misstatements” suggested both a public policy issue and a research methodology issue.
Using data from Automated Access to Court Electronic Records (AACER), I recently posted about the 4.2% drop in total bankruptcy filings for the month of April, which came on the heels of a 35% increase in the month of March. These are national figures and mask considerable variations across the country. To look at variation across the country, I compared the total daily bankruptcy filing rate for the first four months of 2010 to the daily filing rate for all of 2009. Also, I used the federal judicial districts as the unit of measurement. Although federal judicial districts are not an ideal geographic breakdown, they do allow for a little bit more nuanced picture than using state-level data and avoid what can be an overwhelming morass of county-level data (which are not readily available anyway)
There are some areas of the country that are experiencing declining or flat bankruptcy filing rates. Of the 91 federal judicial districts (not counting Puerto Rico, Guam, and the Virgin Islands), 22 have experienced a decline or no increase in the bankruptcy filing rate. As the map to the right shows (click on it for a bigger image), the areas with declines (blue) are mainly in the southeast. Nevada stands out as an exception, although that district experienced such huge increases last year, its decline for the first four months may just be a regression to the mean.
The rate of increase across the entire nation was 10%. There are 29 judicial districts that saw a rate of increase greater than 10%. Those judicial districts fall principally in three areas: the plains and west coast, the upper Midwest, and the northeast. Thus, the national statistics do mask a great deal of regional variation. I’ll stop there — my flight is about to get called.
The daily bankruptcy filing rate in April was 6,631, which was a 4.2% decline from March. The April filing rate was 13.2% higher on a year-over-year basis, but that is the lowest year-over-year increase since the trough after the 2005 changes to the bankruptcy law. As always, a thank you goes to Automated Access to Court Electronic Records (AACER) for supplying the data.
Before we get carried away with what looks like really good news, it is important to keep a few points in perspective. First, April has tended to see declines in the bankruptcy filing rate (see the table to the right). It’s all part of the annual cycle of bankruptcy filings. Because February and (especially) March tend to have inflated filing rates as people use their tax refunds to pay for bankruptcy court costs and attorneys fees, April tends to see a decline as the filing rate moves back toward its mean. Second, the monthly bankruptcy filing rates do what a lot of data series do–that is, they move up and down. It’s probably not profitable to draw conclusions from one month’s worth of bankruptcy data. Indeed, it has only been a few years since information technology made reporting of monthly bankruptcy filing figures easy to do. Before then, we generally only looked at quarterly data. Third, as I’ll explore later, there is a great deal of regional variation. Some parts of the country, especially in the west, are still seeing increasing filing rates.
According to a story in this morning’s BNA Bankruptcy Law Reporter, the Congressional Research Service (CRS) released a study stating the 2005 amendments to the bankruptcy law (the Bankruptcy Abuse Prevention and Consumer Protection Act or BAPCPA) will not permanently reduce the U.S. bankruptcy filing rate. Those findings fit with what we have been seeing the past few months. Even on a per capita basis, the March 2010 bankruptcy filing rate matched the rate from before the 2005 amendments.
CRS reports are not publicly released as a matter of course, and the Bankruptcy Law Reporter is a subscription service. Hence, I can’t link you anywhere for this information. If someone does have a copy of the CRS report, I will be happy to make it available here through Credit Slips and/or pass it along to Open CRS.
Media outlets are reporting that bankruptcy filings climbed sharply in March (see, for example, Duff Wilson’s report in the New York Times or the Reuters wire story). Those reports are not wrong, but they don’t tell the whole story. As always, many thanks to the ever efficient Automated Access to Court Electronic Records (AACER) for providing the data.
It is true that there were over 158,000 bankruptcy filings in March 2010, and it is also true that this figure represents a 35% increase over February. Long-time Credit Slips readers know the golden rule for monthly bankruptcy filing data: Thou Shall Adjust for the Number of Business Days in the Month. The total monthly bankruptcy filing figures are very sensitive to the number of business days in a month. In fact, since 2007, the number of business days alone explains about 30% of the variance in the month-to-month differences.
There were 23 business days in March as compared to only 19 in February. Once one adjusts for the number of business days, the March filing figures show a much less dramatic increase and an increase that is very much in keeping with both historical cycles and recent trends. March had a daily bankruptcy filing rate just under 6,890, which is a 11.6% increase from the February daily bankruptcy filing rate of 6,170. To put some perspective on the 11.6% increase, consider that February was a 14.2% increase over January. These increases are consistent with the historical cycle of filing rate increases early in the year. If the cycle holds again this year–and there is no reason it shouldn’t–the rest of the year should have a relatively constant filing rate until late fall.
While the media focuses on the total number of filings, a drill down into those data can also tell us something about the pain that families are suffering. In the last two years, since the foreclosure crisis, the fraction of all consumer filings that are chapter 13 cases has plummeted. In the language of taste tests of soda pop, today’s consumers prefer chapter 7 three-to-one over the competition (aka chapter 13). Check out these data from the UST Program. In 06-07, chapter 13s averaged about 38% of all filings. In 08, there was a steep drop to 31%; and in 09, a further drop to 26.5%. These are really big changes in such a large system.
The obvious explanation for this fall in chapter 13 is a decline in people trying to save their homes, which we think is a major reason that people chose chapter 13 instead of chapter 7.
Homeowners in 2008 and 2009 seem to have realized three things: 1) home prices are not going up anytime soon; the “crisis” is a long-term change in the housing and mortgage markets; 2) they are not going to get a loan modification; the Administration’s projected numbers of those who would be helped by HAMP and HARP were fanciful (dare I say “misleading”?); and 3) they simply cannot make their mortgage payments in a world where overtime is being eliminated, unemployment is a fear or reality, increased tax burdens loom as states and localities can’t make ends meet, and many other costs remain high (gas, health care, etc.) Many people had these realizations in 2008, and many more had them in 2009. Each year, the share of chapter 13 filings plummeted. And all this, despite BAPCPA’s purported intent of driving up chapter 13 filings and making people pay more of their debts.
Homeowners’ pessism may not be a bad thing. In a research paper that I authored with John Eggum and Tara Twomey, we found that chapter 13 filers in April 2006 (before the foreclosure crisis) had very high homeownership costs, with more than 70% of homeowners trying to save homes that subsumed more than 30% of their incomes (the long-standing standard for affordable housing). The lower fraction of chapter 13 filings may ultimately translate to a higher rate of plan completion for chapter 13; if consumers are reticient to try to save homes with high costs, maybe more than 1 in 3 chapter 13 plans will make it to completion and a higher fraction of chapter 13 debtors will earn a discharge. Time–a long time, given the five year repayment plans that dominate chapter 13–will tell if the lower proportion of chapter 13 cases as a share of total bankruptcies will correlate with a higher discharge rate for chapter 13.
Pick which blog post you want to read:
The year-over-year increase in bankruptcy filings for February hit its lowest mark since the trough in filings after the 2005 changes to the bankruptcy. February saw only 6,170 filings per business day which was a 13.3% increase over February 2009. The rate of increase in bankruptcies is leveling off, possibly indicating a brightening financial picture for the middle class. The February figures continue a trend that has been developing over the past several months, as discussed in the blog post discussing the January figures and its accompanying graph.
Or, if you would prefer:
The daily bankruptcy filings in February (6,170) hit its second-highest point since the 2005 changes to the bankruptcy law. February daily bankruptcy filing rate was a 14.2% increase over January. If the trend continues, 2010 will be a record year for bankruptcy filings, possibly even eclipsing the aberrational year of 2005 when people filed in a rush to beat changes to the bankruptcy law. These figures show a deteriorating financial picture for the middle class.
The figures in both paragraphs are accurate. It’s all in how you pitch it, and if you read the blog regularly, you will remember me bemoaning the often hyped-up presentation of the bankruptcy figures just to create sensational headlines. To get a balanced sense of what the bankruptcy filing figures are telling us, there are a few key points always to keep in mind.
On the heels of Monday’s post about the January bankruptcy filing rate, I intended to write something insightful about chapter 11 filings in different places around the United States. After playing with the data, there are at least three problems with such a post. First, it is Thursday already–egad–putting us well past the heels, ankles, or even thighs. Second, “insightful” is a high ambition; “mildly interesting” would be better. Third, chapter 11 data are noisy, making it difficult to impossible to say anything about filing rate trends.
The last point might be of interest to those of us who like to look at filing rate trends, and I thought I would give it some elaboration. The graph shows the monthly number of chapter 11 filings by legal entities (such as corporations, partnerships, and LLCs) in four different federal judicial districts. Note that the scales are different in each graph. The filing rates are from the Bankruptcy Data Project at Harvard (BDP), using data supplied by AACER. My original thought was to look at the chapter 11 filing trends in different locales, perhaps comparing these trends to local economic conditions or consumer bankruptcy filing rates. That’s just not going to work, at least not without some further data manipulation.
The problem is that the chapter 11 filing figures show tremendous volatility as shown by the spikes in the chart. All of the four districts–and I picked these because they are higher population districts–have sudden and abnormal surges in chapter 11 filings. For example, in August 2008 legal entities filed 215 chapter 11 petitions in the Central District of California (CACB) as compared to only 48 in July and 31 in September. In fact, in no other month during 2008 were there more than 67 legal entity chapter 11 petitions in this judicial district. This volatility would not be a problem if it was capturing some underlying phenomenon, but it’s not.
The January bankruptcy filing basically held steady to December, according to the new bankruptcy statistics now available from Automated Access to Court Electronic Records (AACER). There were just over 102,000 total bankruptcies spread over the nineteen business days in January. That is a daily filing rate of 5,386, a rise of only 1.3% from December’s daily filing rate of 5,319. For monthly bankruptcy filing rates, a 1.3% increase probably does not rise above the threshold of statistical noise.
The January 2010 rate is a 20.6% year-over-year increase from January 2009. That may sound like a hugely impressive annual increase, but regular Credit Slips readers will know better. To keep the 20.6% year-over-year increase in perspective, consider that January 2009 had a 31.6% year-over-year increase compared to January 2008 which in turn was a 21.3% increase as compared to January 2007. It’s not that double-digit increases in the bankruptcy filing rate are something to be sanguine about. Rather, the rate of increase in the rate of increase appears to be slowing. As the graph shows (click for a larger view), the year-over-year increase started slowing in August of last year. I attribute this slow down to the filing rate just catching up with its “natural” level after the trough following the 2005 changes to the bankruptcy law rather than any fundamental changes in the economic situation.
With one month of data, it is way too early to be making too many projections about annual U.S. filings. When I ran the numbers for January 2010, however, I noticed that the month of January constituted 6.4% of the bankruptcy filings in 2008 and 6.2% of the bankruptcy filings in 2009. Do two years of relatively consistent January numbers make for a trend? If so, then the January 2010 data suggest total annual bankruptcy filings will be 1.60 to 1.65 million. That would be just below my estimate of 1.70 million (or slightly more) filings for 2010.
It can really bug me when blogs have posts that are just a naked attempt to draw traffic to their site. These posts always are sure to contain a few words that will attract the attention of search engine users seeking porn or the usual titillating web sites. Seemingly random references to celebrities such as Brittany Spears, Rihanna, or Paris Hilton will be put into the blog. And, worse of all, these naked attempts at self-promotion will use word repetition and appear near the beginning of the web page to optimize their search engine placement. Therefore, I was not surprised to find references to the 15-year old bankruptcy case of the late Anna Nicole Smith, who was often described as sexy and buxom.
On a more serious note, it was somewhat puzzling to see references to this old bankruptcy case. It was dredged up for an AP story that was sourced to “newly released government files” obtained by a Freedom of Information Act (FOIA) request directed to the Department of Justice. The article cites to “the bankruptcy examiner’s report.” I don’t give a rat’s pa-too-tee about the contents of the report, but I wondered about the whole FOIA thing. If this was a bankruptcy examiner’s report, wouldn’t it be part of the public court record? Why did they need to use FOIA? If the court ordered the report filed under seal or otherwise made the report unavailable, then why can a FOIA request effectively circumvent the court order? Or, was this not a bankruptcy examiner’s report in the technical sense of the term and, if so, what was it?
Classes started today. This semester I am teaching Business Bankruptcy, which principally covers chapter 11. We were talking about the bankruptcy court system, a topic that does not always get covered in great detail in the other bankruptcy courses, and the appellate steps in the bankruptcy system. A student asked how many U.S. Court of Appeals cases each year involve bankruptcy.
That was a good question, so I looked it up. What’s your guess for the number of U.S. Court of Appeals cases, as reported by the U.S. judiciary, that involve bankruptcy each year? Answer after the jump.
On a daily basis, December bankruptcy filings fell to 5,304. That is a 12.8% decline from November. According to Automated Access to Court Electronic Records (AACER), there were over 116,600 filings spread over the 22 business days in December. The December figures do represent a 16.2% year-over-year increase, but that is the smallest year-over-year increase since the 2005 changes to the bankruptcy law worked their way through the system. Also, the end of the year tends to see drops in the daily filing rate, as we have seen this year, and the 2009 drops are higher than in previous years. The December 2008 drop was 10.8%
The bottom line is that bankruptcy filings continue their long-term rise, but the rate of increase is slowing. The December 2009 figures are right in line with my estimated increase of 17% for all of 2010 (which would bring us to around 1.7 million total filings annually). This is hardly great news but also hardly awful news considering that the past three years have seen annual increases of around 30%. I’ve updated the filing trend graph in an attempt to show the long-term trend.
The Wall Street Journal reported “Personal Bankruptcy Filings Rising Fast,” a sentiment echoed in many other media reports about the December 2009 bankruptcy figures. Why the discrepancy between these dramatic reports and my more measured report? First, I don’t have to sell advertising space or subscriptions. Second, the total December filing figures are actually above the November figures (116,600 as compared to 115,500), but there were three more business days in December. These media reports are relying on figures from the National Bankruptcy Research Center and passed along from the American Bankruptcy Institute, neither of which adjusts for the number of days in a month. Moreover, these reports emphasize the year-over-year increases without placing them in a larger context.
How many U.S. bankruptcy filings will there be in 2010? A “projection” would imply all sorts of careful analysis with regressions and charts. I don’t have that, but I do have a guesstimate based on the trends we have seen recently. Last year, I made a guesstimate of a little under 1.40 million bankruptcy filings, and we are going to have 1.45 million bankruptcy filings in 2009. That’s not too bad for a guesstimate.
It’s probably best to think about the possible outcomes as a range. Right now, bankruptcy filings are running about 6,000 per day. That is an annual filing rate of just over 1.5 million. The rate of increase in bankruptcy filings is falling, but it is unlikely that bankruptcy filings will actually decrease next year. With the last part of 2009 seeing continued declines in the amount of consumer credit, short-term bankruptcy filing rates should increase as consumers run out of the ability to borrow in order to stave off the day of reckoning. In the long-run, the decline in consumer borrowing will have a negative effect on bankruptcy filing rates–if there is less debt, there is less reason to file bankruptcy–but those effects probably won’t be felt until later in 2010 or in 2011. It is unlikely that we will have less than 1.5 million bankruptcy filings in 2010.
According to data from Automated Access to Court Electronic Records (“AACER”), there were about 115,500 total bankruptcy filings in November 2009. This is a drop from October but, contrary to a few reports, not a big drop in filings from October. The raw numbers declined quite a bit–133,300 to 115,500–but November had nineteen business days as compared to twenty-one business days in October. On a daily basis, the November filing rate was 6,079, which is a 4.3% drop from October. The Calculated Risk blog did it exactly right by putting a disclaimer right at the top of its post reporting the raw numbers from a different data source: “The monthly data is noisy and is not adjusted for days in the month.”
Moreover, the November drop is keeping with seasonal patterns as shown by the graphs in one of my previous blog posts. The end of the year typically sees a decline in bankruptcy filings. This year’s November drop of 4.3% is higher than previous years. Indeed, in 2007 and 2008, November was not a month that saw any drop. The November filing rate has to be coupled with December. To see where bankruptcy filing rates might be headed in the long-term, December 2009 will be an important indicator as well as January – March of 2010, months that normally see big increases.
The daily bankruptcy filing rate in October hit 6,200, setting a new record since the 2005 changes to the U.S. bankruptcy law. There were about 130,200 total filings spread over the 21 business days in October. The October filing rate is a 3.7% increase from September and a year-over-year increase of 25.3%. As always, these data are courtesy of Automated Access to Court Electronic Records (AACER) There are two ways to receive this news, both of which have some validity.
First is the “glass is all the way empty” approach, that the rise in the bankruptcy rate reflects the poor health of the economy, results from rising unemployment, and is a sign that the U.S. consumer is not as healthy as recent figures showing GDP growth might suggest. Although I continue to think that the primary short-term driver of ups and downs in the filing rate is the availability of consumer credit, there is no way to look at record bankruptcy filing rates and not see problems for the U.S. consumer.
It also right to look at these data as saying the “glass is only half empty.” This is not the same as saying the most recent data should be interpreted optimistically, that is the glass is half full. Rather, it is a subtle and complex story trying to draw a distinction between “dire” and “not good.”
The graph to the right shows the month-to-month change for the past three years. (I have omitted 2006 because, and especially for the early months that year, its bankruptcy filing trends were greatly affected by the 2005 changes to the bankruptcy law.). The graph shows seasonality in the bankruptcy filing data — sharp rises early in the year and a decline toward the end of the year. Part of the seasonality has been an increase in the fall of each year, and the October 2009 figures fit that pattern.
Controversy abounds these days about whether government programs should adjust downward to reflect cost-of-living and income declines. I’d like to stir up a little controversy here at Credit Slips about Bob Lawless’ recent post that said the drop in median state income will “make it harder to file bankruptcy.” First, I don’t quite follow the logic of the concern. Even if the income cut-off drops, “median” still means that half of all people are below the number. I would expect those considering bankruptcy to occupy the same places in the distribution of incomes in their state, regardless of median income fluctuations. So, it seems to me then that the fraction of potential bankruptcy debtors with above-median income would remain constant, even if the median income drops. The legal standard isn’t changing, so I don’t think it is fair to call the change in median income a “tightening” of the bankruptcy law. Second, even if bankruptcy filers don’t experience the general decline in income of the state’s entire population, the effect of a change in median income on bankruptcy eligibility is likely to be very, very small. Bob admits the change won’t affect “a lot” of people but also says it won’t be “a few.” I think it really will be just a few. Why? Because the fraction of those made ineligible because of the means test is really tiny, and so even over an anticipated 1.5 million bankruptcy cases in 2009, we are looking at a minute change when we talk about adjusting the operation of the means test. In 2008, only 10% of chapter 7 debtors had above-median incomes. And nearly all of that 10% passed the means test once expenses are deducted. According to its report, the U.S. Trustee filed a motion to dismiss for abuse in 2,881 Chapter 7 cases–that works out to 4% of all above-median cases and .4% of all chapter 7 cases. Those numbers are hard to square with any fear that there will be any measurable change in the fraction of people made ineligible for chapter 7 this year. Importantly, these numbers don’t reflect how the very existence of a median income test may discourage people from filing a bankruptcy case or may push people directly to chapter 13 rather than risking an abuse determination. But again, that effect—whatever its magnitude—probably won’t change with median income fluctuation.
Long time readers of Credit Slips may have noticed that my blogging has flagged the past few months. That is because my colleagues, Jennifer Robbennolt and Tom Ulen, and I have been working on a text entitled Empirical Methods in Law. It is intended to be a user-friendly guide to the topic, useful (we hope) as both a deskbook and a textbook. It should be out later this year, and I’ll try to say more about it.
In the early part of this past week, I was at the annual meeting for the National Conference of Bankruptcy Judges (NCBJ). It was in Las Vegas, which is always fun, but for me I got to meet up with many of my former colleagues at UNLV. The NCBJ meeting is always great. The panels are a good mixture of day-to-day practicalities and the big picture. Plus, you often get to hear what is on the judges’ minds. There were about 1800 attendees this year–so I understand–if you’re a bankruptcy lawyer it’s worth going if you never had a chance. Next year, it’s in New Orleans.
Between our book and my trip–oh, and I had to do a faculty workshop on Thursday–a few things piled up.
In a post yesterday, I used bankruptcy filing figures from Automated Access to Court Electronic Records (AACER) that showed just over 125,500 total filings in the month of September. A large number of news stories reported there were 124,790 consumer filings in September (e.g., here, here, and here). In turn, these stories were sourced to the American Bankruptcy Institute (ABI), which in turn attributed its data to the National Bankruptcy Research Center. This is too small a difference (about 0.5%) to be explained by a discrepancy between consumer versus total filings.
Both of these figures cannot be right. I have posted about how I have beaten on the AACER data and found them accurate. Also, I wrote to AACER, and they verified their September 2009 number. For these reasons, I believe the AACER report on September bankruptcy filings is accurate. I wonder whether the ABI release did not confuse total filings and consumer filings. It’s not that I feel the need to call out a mistake by the media or the ABI on the September figures. Goodness knows that I make a lot of mistakes, and I may be mistaken here. Rather, my attempt to reconcile the two figures reminded me again that the line between consumer and business cases is so thin that it often is not profitable to make the distinction.
The good folks at Automated Access to Court Electronic Records (AACER) report there were over 125,500 total bankruptcy filings in September. The daily bankruptcy filing rate was 5,980 for an increase from August of only 0.5%.
Recent media reports and blog posts like to comment on how monthly bankruptcy filings have surged, soared, and skyrocketed. The reality is not as dramatic. The bankruptcy filing rate remains pretty much where it was in March when it was 6,000 filings per day. In fact, from March to September the daily bankruptcy filing rate has been 6,000 filings per day. (Those are not rounded-off figures.) From month-to-month the rate has moved up and down a few percentage points, but that is what monthly rates do.
The dramatic comparisons (and news stories and blog posts) come from year-over-year increases. September 2009 did show a 31% year-over-year increase as compared to September 2008. Guess what? That is the lowest year-over-year increase since September 2008, which showed a year-over-year increase to September 2007 of 28.9%. In turn, September 2007 had a year-over-year increase of 27.9% as compared to 2006. In fact, the average monthly year-over-year increase since January 2007 has been 37.6%. If you want a big headline, all you have to do is report the year-over-year increase. By that measure, however, September 2009 had a lower-than-average year-over-year increase.
It is September 8, and I never did my monthly post about the latest U.S. bankruptcy filing figures. Hopefully, late is better than never. According to data from Automated Access to Court Electronic Records (AACER), there were slightly more than 124,000 bankruptcy filings in August. Spread over the twenty-one business days in August, there were 5,914 filings per day. That represents a negligible 0.6 decline from the July rate of 5,948 filings per day.
A big feature of the 2005 changes to the U.S. bankruptcy law was supposed to be a means test that would get people into chapter 13 instead of chapter 7. Because a chapter 13 requires a 3- or 5-year repayment plan, the law’s advocates pitched it as an attempt to force “can pay” debtors to repay a portion of their debts. Initially, chapter 13 rates did go up, but that was a statistical artifact of the huge surge in filings just before the 2005 law. As I have noted previously, the chapter 13 rate has been declining ever since.
I am now officially going to call it ….
Anyway you measure it, chapter 13s have returned to their historical level. In fact, one could even interpret the data to show that chapter 13s are slightly below their historical norms. As a percentage of all filings, the chapter 13 rate for July 2009 was 28.1%, and the chapter 13 rate for the first seven months of 2009 was even less–27.6%. In 2004, chapter 13s were 28.1% (the red line in the graph) and from 1999 – 004 they were 29.0%. The 2005 bankruptcy law accomplished nothing about chapter choice.
This is just another sign of the futility of the 2005 bankruptcy law. As I’ve said on numerous occasions, it did nothing to change the underlying economic reality for consumers in deep financial distress. It’s not a surprise that the supposedly central goal of the law–more chapter 13s–has not come to pass. Of course, the unstated goal of the 2005 bankruptcy law was to raise the cost of filing and lower the benefit of doing so that consumers would wait longer to file bankruptcy while paying huge default interest rates and penalty fees. In a paper that my colleagues and I published out of the Consumer Bankruptcy Project data, we found the effect was exactly that–consumers are waiting longer to file bankruptcy.
As many Credit Slips readers may be aware, Countrywide Home Loans (which is now part of Bank of America) has been the subject of proceedings in several bankruptcy courts because of the shoddy recordkeeping behind their claims in bankruptcy cases. Judge Marilyn Shea-Stonum of the U.S. Bankruptcy Court for the Northern District of Ohio recently sanctioned Countrywide for its conduct in these cases. Having previously found Countrywide to have committed sanctionable conduct, the question for Judge Shea-Stonum was the appropriate penalty.
The resulting opinion makes extensive reference to Credit Slips regular blogger Katie Porter and guest blogger Tara Twomey’s excellent Mortgage Study that documented the extent to which bankruptcy claims by mortgage servicers were often erroneous and not supported by evidence. Specifically, the court adopted Porter’s recommendation from a Texas Law Review article that mortgage servicers should disclose the amounts they are owed based on a standard form. Judge Shea-Stonum found that such a requirement would prevent future misconduct by Countrywide. All of Countrywide’s claims now or hereafter pending in this court have to be supported by the form attached to the end of the opinion.
If you look at the form and wonder “Weren’t mortgage servicers disclosing this information anyway?” The answer is that they often were not. Hence the need for such a form. Although the issue before the court was only what do to with Countrywide, we should move toward this sort of form as a requirement nationally for all mortgage servicers. (Hat-tip to Professor Marianne Culhane for pointing me toward this opinion.)
My blogging has been a little light lately. Two of my University of Illinois colleagues (Jen Robbennolt and Tom Ulen) and I have been finishing our forthcoming text, Empirical Methods in Law. I am glad to say that we now have a complete manuscript and are looking at a publication date in December. (If you are an academic who might want to teach out of the materials and would like to see them, shoot me an e-mail.)
Among the posts that did not get done was my monthly update on U.S. bankruptcy filings. Earlier this week, Automated Access to Court Electronic Records (“AACER”) sent me the statistics through July. The figures show 130,530 total bankruptcy filings over 22 business days in July for a daily filing rate of 5,933. The daily filing rate is a 4.0% increase from the previous month and a 35.4% increase for the same time period one year ago. The 4.0% increase in July comes on the heels of a 5.5% decline in June. The pattern for this year has been the same as in the past few years. The late spring and summer months have seen monthly ups and downs in the bankruptcy filing rate, but the variations tend to cancel each other out. The July bankruptcy filing rate is virtually the same as it was in March.
Last week I joined the Credit Slips custom of presenting testimony to Congress on bankruptcy matters. (My written testimony has apparently been posted here.) This outing was before the House Judiciary Committee’s Subcommittee on Administrative and Commercial Law. The hearing was Tuesday, July 28, and was on the subject whether the U.S. healthcare system is bankrupting Americans. (If anyone is more computer-savvy they can post a link; I couldn’t find one readily.)
The hearing centered on the CBP study on medical bankruptcies (presented by Dr. Steffie Woolhandler), and had an American Enterprise Institute critic sent to perform a targeted (and at a couple times downright snarky) methodological attack. The tireless Elizabeth Edwards was there too, making her well reasoned and impassioned arguments to the subcommittee and to the racous audience (which included, among others, Dr. Patch Adams). My own testimony reported some findings on rising elder Americans filing for medical bankruptcy but also explained how to distnguish good from bad studies trying to measure medical bankruptcies — for example, cautioning skepticism with any study that purports to distinguish medical “vs.” credit card debt(!). At one point, the hearing got really nerdy and we got into a tiff over the relevance of linear regressions as either necessary or sufficient for causal inference. (Best line: “I teach linear regressions!”) Anyway, it was the usual legislative theater, but I also think some points hit home.
Complaints about mortgage servicers are piling up almost as fast as foreclosures. Yesterday CNN reported that the GAO has concluded that the Obama Administration’s HAMP and HARP programs to do loan modifications are off to a very, very slow start. The programs were announced in February, and to date we have 180,000 people in three-month trial modifications. That’s a far cry from the 3-4 million people the Administration believed would be helped. Consumer advocates say that servicers remain unresponsive to requests for loan modifications, citing the same stories of incompetent or inadequate personnel, lack of follow-up, and refusal to modify unless a homeowner is in default.
At the same time, judicial criticism of mortgage servicing is picking up steam. A good example is Bankruptcy Judge Diane Weiss Sigmund’s opinion, In re Taylor, released in April. The thoughtful opinion sheds light on the underbelly of mortgage servicing. She details the relationship between local and national counsel, Lender Processing Services (formerly d/b/a Fidelity National), and the mortgage servicer. Among other things, she finds that the attorney signing the proof of claim, a legal document filed with the court, reviewed a “sample” of 10% of the claims that his own signature was affixed to. In Taylor the proof of claim had the entirely wrong person’s note attached to it (I wonder about a privacy violation here as bankruptcy documents are public), and an incorrect payment amount.
On a monthly basis, Tara Twomey and I post an updated version of our Mortgage Servicing Resources document to our Mortgage Study website, which also contains our papers on the subject. We are grateful to colleagues from around the country who forward us interesting cases that we collect in this document, but we wish studying mortgage servicing wasn’t such a growth industry. We hope the Obama Administration can find a way to shape up mortgage servicers in time to help Americans keep their homes.
The National Center for Policy Analysis (NCPA) is flogging a study from the Fraser Institute in Canada that purports to show U.S. medical bankruptcies are a “myth” because the Canadian bankruptcy rate is higher than in the United States. Reuters and BusinessWire have run the NCPA’s press release as a story on their news services. Before anyone takes this study seriously, a few important facts are needed to place the Fraser Institute findings in context. To be as charitable as possible, the study’s use of the bankruptcy data is extremely selective.
First, the Fraser Institute study begins by observing that advocates of a single-payor U.S. health care system use the assumption that such a system would prevent many U.S. bankruptcies because of the medical debt found among many U.S. consumers filing for bankruptcy. The study states, “We should expect to observe a lower rate of bankruptcy in Canada compared to the United States, all else being equal.” First, I’m not sure that is an assumption made by advocates of a single-payor system (and I don’t count myself as one of them). Second, the qualifier “all else being equal” is the whole point. There is a lot that is not equal between the U.S. and Canada, and there is no reason to expect bankruptcy rates to be precisely similar. Even on its own terms, however, the Frasier Institute study is highly suspect because of the narrow window it uses for its bankruptcy data.
The Fraser Institute study, which is really just a three-page report of existing data from government sources, used bankruptcy filing data for the calendar years 2006 and 2007 as the “most recent data.” Both the Office of the Superintendent of Bankruptcy Canada and the U.S. courts have 2008 data available. For a report that carries a July 2009 date, the years 2006 and 2007 would not seem to be the most recent data available. Authors have to prepare publications in advance of their appearance, but the U.S. data were available in a press release dated March 5, 2009, and the Canadian data appear on a web page that states “modified March 11, 2009.” There was surely plenty of time to use the 2008 data for a 3-page paper that has fewer data than this blog post. By limiting the data to 2006 and 2007, however, the report is able to support that the anti-health care reform agenda that the NCPA and the Fraser Institute seem to further.
The most recent bankruptcy filing data from Automated Access to Court Electronic Records (AACER) show a 6.1% decline in the U.S. daily bankruptcy filing rate. The were about 124,800 bankruptcy filings in June which, spread over the 22 business days in the month, is a daily bankruptcy filing rate of 5,672. In May, the daily bankruptcy filing rate was 6,038.
I do not take the dip in bankruptcy filings as strong evidence that the end of the recession is just around the corner. First, there is the usual caution against reading too much into the ups and downs of a monthly indicator. Over the past eight months, the bankruptcy filing rate went up four time and down four times, although cumulatively the increases have been more than the decreases. (The daily filing rate is 11.7% higher than eight months ago.) Second, although the month-over-month figure is a decline, bankruptcy filings are up sharply on an annual basis. The June 2009 figure is a 32.5% increase over 2008. Over the entire year, projections show that 2009 bankruptcy filings will be 28.2% – 36.4% greater than 2008. As I discussed last month, the long-term trend is toward the same filing rate as before the 2005 bankruptcy law was adopted. Third, bankruptcy filings lag macroeconomic bad news. Yesterday’s news about the jump in unemployment shows the U.S. recession is far from over, and those unemployed may show up in the bankruptcy courts much later. People do not run into bankruptcy court the day they are laid off. in our most recent empirical work from the Consumer Bankruptcy Project, more than 50% of bankruptcy filers told us they struggled for more than two years before filing bankruptcy.
Projecting forward, total 2009 U.S. bankruptcy filings will be:
- 1,404,000 filings if bankruptcy filings continue for the rest of the year at the same daily rate (5,593 per day) as they have averaged for the first six months of 2009
- 1,414,000 filings if bankruptcy filings continue at the same daily rate (5,672 per day) as they have averaged for June
- 1,494,000 filings if bankruptcy filings for the remaining six months of 2009 constitute the same proportion of total filings as the last six months of 2008 constituted for total filings that year (about 53.2%)
According to data from Automated Access to Court Electronic Records (“AACER”), there were over 120,000 U.S. bankruptcy filings in May 2009 or 6,020 for each of the 20 business days in May. That is the first time daily bankruptcy filings have topped the 6,000 mark since the 2005 bankruptcy law was adopted.
The May filing rate represented a 2.8% increase from the previous month and a year-over-year increase of 40.9%. The April daily filing rate had declined by 2.4%, meaning the increase in May just made up for the April decline plus a little more. The pattern for 2009 is consistent with recent years with monthly up and downs through the summer but no consistent increases until later in the year. It is important not to make too much out of the month-to-month changes in the bankruptcy filing rate. It is the long-term trend that matters, and the graph to the right shows how the long-term trend is heading us back toward the daily filing rate before the 2005 law was enacted.
The Associated Press has launched the Economic Stress Index. Credit Slips readers will find it very useful and interesting. For a dataphile like myself, it’s just plain cool. OK, it’s not cool at all because it shows the tremendous depth and breadth of middle America’s suffering. But, it shows what someone with real data know-how and computer graphic skills can do.
The Economic Stress Index “weighs three economic variables — unemployment, foreclosures and bankruptcy — to produce a score on a scale of 0-100 that measures how the recession is affecting a county compared to all others.” You can scroll over each county and get a separate measure for each of the components or for the composite Economic Stress Index. The press release indicates the index and data will be updated monthly. Check it out.
April 2009 bankruptcy filings dipped slightly from March. The 2.2% decline keeps the calendar year 2009 in line with recent historical patterns of heavy filing increases in the first part of the year followed by no changes or slight declines for the summer and fall months. The bottom line is that the latest numbers continue to indicate a filing rate well above 1.4 million filings for the year and perhaps close to 1.5 million filings.
As always, the good folks at AACER have provided the April filing data, and they report 128,720 filings for the month of April. Spread over the 22 business days in April, that is 5,851 filings per day. Although the month-over-month data show a 2.2% decline, the April 2009 filing rate is 38.1% higher than the filing rate in April 2008. 2009.
Using the data we have so far in 2009, we can make some predictions about the rest of the calendar year. The United States will see:
- 1,366,000 filings if bankruptcy filings continue for the rest of the year at the same daily rate (5,462 per day) as they have averaged for the first four months of 2009
- 1,430,000 filings if bankruptcy filings continue at the same daily rate (5,851 per day) as they have averaged for April
- 1,490,000 filings if bankruptcy filings for the remaining eight months of 2009 constitute the same proportion of total filings as the last eight months of 2008 constituted for total filings that year (about 69.6%)
The 2005 changes to the U.S. bankruptcy law were supposed to move more debtors into chapter 13 with the idea that they would have to pay at least a portion of their debts. In March, however, the chapter 13 rate dipped below the old chapter 13 filing rate. Not only do these latest figures suggest the 2005 law is not working as its supporters promised but also that the latest spikes in bankruptcy filing rates are from persons in the most desperate financial conditions.
Of the noncommercial petitions filed in March 2009, only 25.5% were chapter 13 cases. These data come from Automated Access to Court Electronic Records (AACER), which defines a “commercial” case as one that involves a corporation, limited liability company, or similar entity, one with an employer identification number (EIN) (instead of or in addition to a Social Security number), or one with a designation such as “doing business as” (d/b/a). All other cases are noncommercial cases.
From 2001-2004, the Administrative Office of U.S. Courts (AO) reported that 29.3% of nonbusiness cases were chapter 13s. “Nonbusiness” is not the same as “noncommercial.” AACER uses a better, more comprehensive definition to calculate “noncommercial” cases, but if we look at all bankruptcy cases together, the numbers don’t change much. The AO reports 28.7% of all cases as a chapter 13 from 2001-2004, and 25.0% of all cases in the AACER data during March 2009 were chapter 13s.
Credit Slips is pleased to have had the following persons join us as continuing blog authors in the past or as guest bloggers for a week. Their contributions have added new perspectives and ideas to this site, and we thank them for their participation.
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As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click on this link and then click on the link for “Join or leave the list.” After completing the information there, please also send an e-mail to Professor Lawless (rlawless-at-law-dot-uiuc-dot-edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.