Bankruptcy Predictions for 2014 and Beyond


            With 2013 behind us, it is time to look ahead to what 2014 will bring to the Bankruptcy World. First, a look at 2013. Filings in the Jacksonville Division continued the decline that started in 2010. 2013 filings were down 8% from 2012 levels and down 35% from the 2010 peak of over 11,000 cases.

            What is causing the decline? The average person will say that unemployment has dropped significantly since 2010 and that has helped lower filings. However, bankruptcy filing rates have historically never been tied to unemployment, health care expenditures or any number of reasons that typically are blamed for increased filing rates. Instead, bankruptcy filing rates have risen and fallen almost perfectly in line with the availability of credit. See chart at:

               So based on the availability of credit, what can we expect for 2014? The good news for everyone except bankruptcy practitioners is that it looks like 2014 will be more of the same declines, just maybe not as steep. Short term credit appears to be increasing which has the effect of pushing down bankruptcy filing rates since people will borrow to put off filing bankruptcy. Greater amounts of long term credit and household debt will inevitably cause the bankruptcy filing rates to increase.

               This is why the 2010 to present drop in filings is easily explainable. After the collapse of the financial markets in 2008, there was no credit available for 2-3 years for the average person. Lack of home equity, tighter credit card standards and almost no unsecured lines of credit created a cash basis for most households. Coupled with high household debt levels, this caused a dramatic upswing in filings from 2008-2010. That has slowly starting to change since 2010 with the increase in available credit brought about by the growth in the economy and housing values. The decline in bankruptcy filings will inevitably reverse itself as long term credit/household debt level increases over the next 12-24 months.

               As in 2008, long term increases in household debt levels coupled with a sharp pullback in the availability of credit due to actual or perceived economic weakness will result in an increase in bankruptcy filings. Most likely, that scenario will not play out for the next year or two as the economy continues to improve. It will be interesting to see how the coming 2014 mortgage standards (tougher underwriting) will impact the availability of mortgage credit and the bankruptcy filing rate. Stay tuned for more on that in a later post.

            At Mickler & Mickler, we attend Court on a regular basis. We have the experience and knowledge to ensure that you receive the correct advice when confronted with difficult financial decisions related to filing bankruptcy. Contact us at 904.725.0822 or


Bryan K. Mickler