What do bankruptcy lawyers and undertakers have in common? Your bad news is their good news. So, if the news from bankruptcy court is bad for bankruptcy lawyers, it’s good news for you.
And the news continues to be bad for bankruptcy lawyers in Oklahoma. Statewide, bankruptcies are down significantly, a trend that is 2 years old. Bankruptcy filings in Oklahoma in 2010 totaled 14,980, then fell in 2011 to 13,119. While the final numbers for 2012 are not in yet, based on the data through the end of November, it looks like the number of new bankruptcy filings in Oklahoma for 2012 will be well under 12,000 – down more than 10 percent from 2011. Virtually all of those bankruptcies are consumer cases, which is also good news for the business reader.
No one reading this would be surprised by any news that Oklahoma’s economy is outperforming national averages. Our unemployment rate is among the 10 lowest in the country. Personal income growth is in the top 20. Despite some bumps, the energy industry is still driving Oklahoma’s economy.
Secure in the preconceived notion that our economy is better than in most other states, I was surprised to see that Oklahoma’s bankruptcy numbers from 2010 to the present are in line with the national trend. Nationwide, filings fell from 1,593,097 in 2010 to 1,410,653 in 2011, and are on track to go below 1,265,000 in 2012 – down more than 10 percent both years. Since the data didn’t fit with my hypothesis, I went a little further back in history to see if there was anything to be learned.
While national bankruptcy filings are back in line with historical figures from before congressional reform of the Bankruptcy Code in 2005 that tightened eligibility for consumer bankruptcy, in Oklahoma the number of bankruptcy filings in 2012 will be less than one half of the average for the four years prior to 2005.
Making it harder to file bankruptcy didn’t affect national numbers when the Great Recession hit. But in a state like Oklahoma that managed to avoid the worst of the recession, bankruptcy filings have been reduced significantly. Nothing beats a strong economy when it comes to keeping bankruptcy lawyers out of work.
Charles Greenough is the leader of the Business Restructuring, Workouts and Bankruptcy Group at McAfee & Taft.
This article appeared in the January 3, 2013, issue of The Journal Record. It is reproduced with permission from the publisher.
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