Personal bankruptcies tend to rise during periods of economic distress due to job loss and loss or reduction of income. Not surprisingly, this pattern was evident during this most recent economic downturn when bankruptcies rose nationally to a peak of 1.537 million in 2010.
Since 2010, the number of bankruptcies has fallen nationally, led by Nevada, where personal bankruptcies fell 26.9% from 2011 to 2012. The decline in bankruptcies is a reflection of improved consumer balance sheets.
However, consumers are also dealing with a stringent lending environment where heightened credit and reserve standards constrain many would-be home buyers.
Ken Fears is the Manager of Regional Economics and Housing Finance Policy. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.