Two economic trends important for buy-here, pay-here operators to watch — employment and bankruptcy filings — both improved in July.
According to the latest U.S. Economic Update produced by Comerica Bank, the nation’s economy added a strong 255,000 net new jobs in July following what the report called a “blowout” of 292,000 net new jobs recorded in June.
Beyond the positive payroll data, Comerica chief economist Robert Dye highlighted most other key labor market metrics improved in July, as well.
“Average hourly earnings increased, as did average weekly hours. So we can say that more workers worked longer hours and got paid better for it in July,” Dye said. “This is the trifecta for income growth which, in turn, is supportive of consumer spending.
“We can also say that the labor market is pulling in more workers from the sidelines,” continued Dye, who noted the civilian labor force in July was 1.4 percent larger than it was in July of last year, well above estimated population growth of 0.8 percent.
Dye calculated this movement has brought the total labor force participation rate up from a low of 62.4 percent in September 2015 to 62.8 percent in July.
Strong growth in the labor force kept the unemployment rate steady at 4.9 percent in July, according to Comerica’s report.
Meanwhile, the American Bankruptcy Institute (ABI) shared data from Epiq Systems that showed total bankruptcy filings declined 15 percent to 61,308 in July, down from the total of 71,875 posted in the same month last year.
Consumer filings came in at 58,386, dropping 16 percent from the July 2015 consumer filing total of 69,214.
While the consumer segment of bankruptcies are improving, ABI pointed out total U.S. commercial bankruptcy filings increased 10 percent year-over-year in July, totaling 2,922 cases.
“Businesses facing financial headwinds continue to turn to the financial fresh start of bankruptcy,” ABI executive director Samuel Gerdano said. “Driven by distress in the energy and retail sectors, commercial bankruptcy filings for 2016 will likely total close to 40,000.”
Total bankruptcy filings for the month of July decreased 8 percent when compared to the 66,303 total filings recorded during the previous month.
The average nationwide per capita bankruptcy-filing rate in July was 2.53 (total filings per 1,000 per population), a slight decrease from the filing rate of 2.56 during the first six months of the year.
Average total filings per day in July were 1,978, a 15-percent decrease from the 2,319 total daily filings in July of last year.
States with the highest per capita filing rates (total filings per 1,000 population) in July were:
1. Tennessee (5.56)
2. Alabama (5.34)
3. Georgia (4.62)
4. Illinois (4.22)
5. Utah (4.10)
ABI has partnered with Epiq Systems, a provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
Bankruptcy figures from the first half of the year that might impact buy-here, pay-here dealers the most showed a notable year-over-year decline in the amount of consumers who might arrive at stores having filed since January.
According to data provided by Epiq Systems, the American Bankruptcy Institute reported that total bankruptcy filings fell to 398,495 during the first six months of 2016, representing a 6 percent decrease from the 422,914 total filings during the same period a year ago.
Officials indicated the 379,025 total noncommercial filings for the first half of 2016 represented a 7-percent drop from the noncommercial filing total of 407,843 for the first half of 2015.
Meanwhile, ABI pointed out that total commercial filings during the first six months of the year increased 29 percent to 19,470. In the same period in 2015, there were 15,071 total commercial filings.
Officials mentioned commercial Chapter 11 filings also climbed during the first half of 2016, as the 3,220 filings represented a 25 percent increase over the 2,575 commercial Chapter 11 filings during the first six months of 2015.
“As economic challenges continue to weigh on the balance sheets of struggling companies, especially those in energy and retail, more businesses are seeking the financial fresh start of bankruptcy,” ABI executive director Samuel Gerdano said. “Commercial bankruptcy filings for 2016 will likely total close to 40,000.”
ABI indicated total commercial filings for the month of June came in at 3,294, representing a 35-percent increase from the 2,442 filings in June of last year. Commercial Chapter 11 filings registered a 36-percent jump as the 366 commercial Chapter 11 filings in June 2015 climbed to 499 in June of this year.
Official added that total bankruptcy filings, however, decreased to 66,284 for the month of June, a 5-percent decline from the 69,772 filings in June of last year. The 62,990 total noncommercial filings for June represented a 7 percent drop from the June 2015 noncommercial filing total of 67,330.
ABI’s information showed the average nationwide per capita bankruptcy filing rate for the first six months of 2016 remained at 2.56 total filings per 1,000 population, and the average total filings per day in June were 2,210, a 5 percent decrease from the 2,326 total daily filings in June of last year.
States with the highest per capita filing rate (total filings per 1,000 population) through the first six months the year were:
1. Tennessee (5.63)
2. Alabama (5.37)
3. Georgia (4.65)
4. Illinois (4.29)
5. Utah (4.15)
ABI has partnered with Epiq Systems, a provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
While the overall figure decreased on both a sequential and annual basis, the American Bankruptcy Institute attempted to find the source as to why total U.S. commercial bankruptcy filings spiked 32 percent year-over-year in May.
According to data provided by Epiq Systems, commercial filings totaled 3,358 in May, up from the 2,550 filings recorded last May. ABI officials pointed out that May is the seventh consecutive month with a year-over-year increase in commercial filings.
The latest report also showed total commercial Chapter 11 filings climbed in May as the 611 filings were 22 percent more than the 502 commercial Chapter 11 filings registered in the same month a year ago.
However, total bankruptcy filings decreased 5 percent to 66,094 in May, down from last May’s total of 69,338. Consumer filings were 62,736, dropping 6 percent from the May 2015 consumer filing total of 66,788.
ABI executive director Samuel Gerdano offered his assessment as to why a growing number of businesses are filing for bankruptcy, likely impacting their former employees who might have some kind of auto financing.
“Businesses, especially those within the energy and retail sectors, continue to turn to the financial fresh start of bankruptcy,” Gerdano said.
Total bankruptcy filings for the month of May decreased 6 percent when compared to the 70,472 total filings recorded in April.
May’s commercial filing total represented a 5-percent decrease from the April commercial filing total of 3,515. Commercial Chapter 11 filings decreased 10 percent when compared to the 680 filings in April.
Total noncommercial filings for May also represented a 6-percent decrease from the April noncommercial filing total of 66,957.
The average nationwide per capita bankruptcy-filing rate in May was 2.56 (total filings per 1,000 per population), unchanged from the first four months of the year.
Average total filings per day in May were 2,132, a 5-percent decrease from the 2,237 total daily filings in May of last year.
States with the highest per capita filing rates (total filings per 1,000 population) in May were:
1. Tennessee (5.64)
2. Alabama (5.36)
3. Georgia (4.56)
4. Illinois (4.36)
5. Utah (4.09)
ABI has partnered with Epiq Systems, a provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
Commercial bankruptcy filings made another swift upward rise in April.
The American Bankruptcy Institute reported that total U.S. commercial bankruptcy filings increased 32 percent year-over-year last month. According to data provided by Epiq Systems, commercial filings totaled 3,482 in April, up from 2,641 registered in April of last year.
Officials pointed out that April marked the sixth consecutive month with a year-over-year increase in commercial filings.
Total commercial Chapter 11 filings also climbed in April, as the 680 filings were 67 percent more than the 408 commercial Chapter 11 filings registered last April.
However, total bankruptcy filings decreased 10 percent to 70,457 in April, down from the April 2015 total of 77,949. Consumer filings were 66,975, dropping 11 percent from the April 2015 consumer filing total of 75,308.
“Distress within a number of sectors, including energy and retail, has more businesses turning to the financial relief of bankruptcy,” ABI executive director Samuel Gerdano said.
“To provide struggling companies a better chance of reorganization rather than liquidation, ABI’s commission to study the reform of Chapter 11 provided recommendations to modernize the bankruptcy code for today’s evolving corporate climate,” Gerdano continued.
April’s commercial filing total represented a 3 percent increase from the March commercial filing total of 3,369. Commercial Chapter 11 filings increased 51 percent when compared to the 450 filings in March.
However, total bankruptcy filings for the month of April decreased 10 percent when compared to the 78,344 total filings recorded the previous month.
Total noncommercial filings for April represented an 11-percent decrease from the March noncommercial filing total of 74,975.
The average nationwide per capita bankruptcy-filing rate in April was 2.56 (total filings per 1,000 per population), an increase from the 2.51 rate registered in the first three months of the year.
Average total filings per day in April came in at 2,349, a 10-percent decrease from the 2,598 total daily filings last April.
States with the highest per capita filing rates (total filings per 1,000 population) in April included:
1. Tennessee (5.66)
2. Alabama (5.39)
3. Georgia (4.62)
4. Illinois (4.45)
5. Utah (4.00)
ABI has partnered with Epiq Systems, a leading provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
While showing some lift when only considering the March data on a sequential comparison, the pace at which bankruptcy filings are declining continued to slow during the first quarter, according to data shared by the American Bankruptcy Institute this week.
Data provided by Epiq Systems showed total U.S. bankruptcy filings fell 5 percent in the first quarter compared to the same span last year. Q1 bankruptcy filings totaled 195,565; that’s down from the year-ago figure of 205,851 filings.
ABI noted the 186,357 noncommercial filings recorded in the first quarter represented a 6-percent decrease year-over-year, down from 198,413 filings.
However, total commercial filings for the first three months of 2016 came in at 9,208, representing a 24-percent increase from the 7,438 filings during the same period in 2015. Total commercial Chapter 11 filings also increased 9 percent from 1,300 last year to 1,419 during the first three months of this year.
“After 22 consecutive declines in total quarterly filings, the drop-off is tapering as more struggling businesses and households turn to the financial relief of bankruptcy,” ABI executive director Samuel Gerdano said.
“Distress in the energy and retail sectors is represented in the increasing total of business filings, and we are also seeing a rise in individual Chapter 11 filings,” Gerdano added.
For March, Epiq Systems data indicated there were 78,332 total recorded filings, representing an increase of 21 percent from the 64,686 filings registered in February. But the March figure was 4 percent lower than the 81,693 filings recorded in the same month last year.
The 74,981 total noncommercial filings in March represented a 22-percent increase over the February total of 61,651, but a 5 percent drop from the 79,016 noncommercial filings registered last March.
Total commercial filings in March increased 10 percent to 3,351 over the 3,035 filings recorded in the same month in 2015, and increased 25 percent from the 2,677 commercial filings registered last March.
The average nationwide per capita bankruptcy filing rate for the first three months of 2016 increased to 2.51 (total filings per 1,000 per population) from the 2.26 filing rate of the first two months of the year.
States with the highest per capita filing rate (total filings per 1,000 population) for the first quarter of 2016 were:
1. Tennessee (5.70)
2. Alabama (5.45)
3. Georgia (4.64)
4. Illinois (4.46)
5. Mississippi (3.89)
ABI has partnered with Epiq Systems — a provider of managed technology for the global legal profession — in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
Still reinforcing a projection that bankruptcy filings would could to decrease this year, the American Bankruptcy Institute reported that total U.S. bankruptcy filings dipped just 1 percent in February compared to the same period last year.
According to data provided by Epiq Systems, bankruptcy filings totaled 64,662 in February, down slightly from the total posted in the same month last year of 65,064 cases.
The data showed consumer filings declined 2 percent in February to 61,662 from the year-ago figure of 62,784.
However, ABI noticed total commercial filings in February jumped to 3,000, representing a 32-percent increase from the 2,280 business filings recorded in February of last year. The 476 total commercial Chapter 11 filings in February represented an increase of 31 percent from last February’s total of 364.
“February showed that decreases in total filings are starting to level off, and more businesses are turning to the financial relief of bankruptcy,” ABI executive director Samuel Gerdano said.
“As the last major overhaul of Chapter 11 took place in 1978, the recommendations of ABI’s Chapter 11 Reform Commission provide an updated roadmap for struggling businesses and courts trying to navigate today’s complex financial terrain,” Gerdano said.
Total bankruptcy filings in February increased 23 percent compared to the 52,542 total filings registered in January. Total noncommercial filings for February (61,662) represented a 24-percent increase from the January noncommercial filing total of 49,728.
The February commercial filing total of 3,000 marked a 7-percent uptick from the January commercial filing total of 2,814, although February’s 476 commercial Chapter 11 filings represented a 4 percent decrease from the 494 filings recorded the previous month.
The average nationwide per capita bankruptcy-filing rate in February was 2.26 (total filings per 1,000 per population), a decrease from January’s rate of 2.02.
Average total filings per day in February were 2,126, signaling a 5-percent decrease from the 2,244 total daily filings recorded in February of last year. States with the highest per capita filing rate (total filings per 1,000 population) last month were:
1. Tennessee (5.39)
2. Alabama (5.09)
3. Georgia (4.73)
4. Illinois (4.10)
5. Mississippi (3.55)
ABI has partnered with Epiq Systems, a provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
Forecast for annual bankruptcy figure
ACA International, the Association of Credit and Collection Professional, recently highlighted in a personal bankruptcy projection by Fitch Ratings. The forecast called for personal bankruptcy filings this year to decline by 6 percent to 8 percent from levels observed in 2015.
ACA International recapped that in 2015, personal bankruptcy filings declined 10.2 percent from 2014, which was in line with predictions by Fitch Ratings.
The annual bankruptcy filings last year totaled 798,690, or 90,745 more than levels in 2014, according to the report. Personal filings in 2015 were less than 1 million for the second consecutive time in eight years, according to the report.
“During 2015, U.S. consumer credit quality sustained stable, albeit positive, momentum. Lower initial jobless claims and continued improvement in unemployment helped drive the decline in consumer filings,” Fitch said according to the report. “While credit usage started to rise last year, spurred by higher consumer confidence levels, overall macroeconomic conditions have generally supported the lower trend.”
Fitch analysts also touched on the factors that influenced the bankruptcy projection.
“Key elements that drive the level of filings are macroeconomic factors, including unemployment, consumer indebtedness, the interest rate and housing environment, among others,” they said according to the report. “Fitch believes sustained job growth, low jobless claims and stronger consumer sentiment as a result of positive equity and real estate markets will support the overall decline.
Fitch noted in its report that personal bankruptcy filings should land approximately between 735,000 and 750,000 this year
“Although the expected decline is lower compared with the projection in 2015, the forecast remains favorable given continued positive macroeconomic conditions, and Fitch believes 2016 will be on target for a sixth straight year of lower personal bankruptcy filings,” analysts said in their report.
Bankruptcy filing trends to begin 2016 mimicked the ones observers noticed as last year concluded.
The American Bankruptcy Institute reported that total U.S. filings decreased 11 percent year-over-year in January. According to data provided by Epiq Systems, bankruptcy filings totaled 52,522 last month, down from the January 2015 total of 59,092.
ABI mentioned consumer filings declined 12 percent last month to 49,720, dropping from the consumer filing total of 56,611 in the same month of 2015.
However, there was one segment of the bankruptcy space where ABI spotted an increase.
Total commercial filings in January 2016 jumped to 2,802, representing a 12-percent increase from the 2,481 business filings recorded in January of last year. The 492 total commercial Chapter 11 filings in January represented a decrease of 6 percent from last January’s total of 523.
“Though total and consumer filings continue to drop, more debt-burdened businesses are turning to the financial fresh start of bankruptcy,” ABI executive director Samuel Gerdano said.
“As debt and capital structures have grown increasingly complex since the last major overhaul of Chapter 11 in 1978, the recommendations of ABI’s Commission to Study the Reform of Chapter 11 would provide a modernized toolkit for the court system and struggling businesses,” Gerdano went on to say.
Total bankruptcy filings for the month of January decreased 2 percent compared to the 53,829 total filings registered in December. Those total noncommercial filings for January (49,720) represented a 3-percent decrease from the December noncommercial filing total of 51,169.
Observers added the January commercial filing total of 2,802 represented a 5-percent increase from the December commercial filing total of 2,660. January’s 492 commercial chapter 11 filings marked a 24-percent spike from the 397 filings recorded during the previous month.
ABI pointed out the average nationwide per capita bankruptcy-filing rate in January came in at 2.02 total filings per 1,000 of population, a decrease from December’s rate of 2.63.
Average total filings per day in January stood at 1,694, an 11 percent decrease from the 1,906 total daily filings recorded in January of last year.
States with the highest per capita filing rate (total filings per 1,000 population) in January were:
1. Tennessee (4.82)
2. Alabama (4.35)
3. Georgia (4.26)
4. Illinois (3.48)
5. Delaware (3.23)
ABI has partnered with Epiq Systems, a provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
Peritus Portfolio Services, which services auto-secured Chapter 7 and Chapter 13 bankruptcy loans, announced this week that its total outstanding balances currently under management now stands at more than $100 million.
President Gary Perdue, who founded the company five years ago, said, “We are excited about our business and what we offer to the auto finance market.
“We exclusively service auto loans in bankruptcy proceedings,” Perdue continued. “Management and most of our service employees have many years of experience in the auto finance industry, and as a result I believe our performance exceeds those companies that service multiple product lines”
Peritus offers a variety of levels of service that ranges from filing proof of claims, handling reaffirmations, and monitoring, to full liquidations servicing. Peritus also has a solution for buy-here, pay-here dealerships that wish to sell portfolios of auto-secured bankrupt accounts.
“We have found that Peritus stands out well above others in their specialized field,” said Sam Ellis, chief executive officer of DriverUp, parent company of Sierra Auto Finance.
“They maximize recoveries for lenders, but still place priority on truly helping the consumers, and do more than just the minimum required to be federal bankruptcy law compliant,” Eillis added. “They are really good at what they do.”
Peritus works with clients of all sizes, from buying and servicing accounts from BHPH dealers to servicing portfolios for one of the largest debt buyers in the U.S.
“I have been in the auto finance industry for over 25 years,” Perdue said. “I focused on bankruptcy because I saw an opportunity to help small buy-here, pay-here dealers as well as large auto finance companies increase recoveries, while reducing overhead.”
For more information on Peritus Portfolio Services, go to www.peritusservices.com or send a message to [email protected].
Although total commercial Chapter 11 filings moved higher for the second month in a row, the American Bankruptcy Institute didn’t waffle from maintaining its projection of what the overall consumer and business filing total should be for the year.
According to data provided by Epiq Systems, all bankruptcy filings in August came in at 67,712, which represented a decrease of 10 percent from last August’s figure of 75,234.
Consumer filings last month also declined 10 percent to 65,248 from year-ago consumer filing total of 72,503.
Where the surge occurred was in total commercial Chapter 11 filings, which increased 48 percent increased to 531 filings in August, up from the 360 commercial Chapter 11 filings registered a year earlier.
Still, total commercial filings in August decreased to 2,464, representing a 10-percent decline from the 2,731 business filings recorded in August of last year.
Back in July, commercial Chapter 11 filings spiked even more than they did last month, climbing 77 percent. But officials didn’t show much concern since the overall bankruptcy figure dipped 7 percent year-over-year.
“While commercial Chapter 11 filings have increased in back-to-back months, fewer distressed consumers and businesses are seeking the financial shelter of bankruptcy,” ABI executive director Samuel Gerdano said. “Filings remain on track to total 800,000, the second-lowest total since changes to the bankruptcy law were implemented 10 years ago.”
Total filings for August represented a 6-percent decrease compared to the 71,854 total filings in July.
Total noncommercial filings for August were also 6 percent less than the July noncommercial filing total of 69,202.
August’s commercial filing total also represented a 7-percent decrease from the July commercial filing total of 2,652.
August commercial Chapter 11 filings experienced an 18-percent decrease when compared to the 645 filings registered the previous month.
ABI also mentioned the average nationwide per capita bankruptcy-filing rate in August was 2.71 (total filings per 1,000 per population), a slight decrease from the 2.73 rate registered in the first seven months of the year.
Average total filings per day in August came in at 2,184, a 10-percent drop from the 2,427 total daily filings in August of last year.
States with the highest per capita filing rates (total filings per 1,000 population) in August were:
1. Tennessee (5.76)
2. Alabama (5.35)
3. Georgia (5.09)
4. Illinois (4.46)
5. Utah (4.40)
ABI partners with Epiq Systems — a provider of managed technology for the global legal profession — in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
There might be less potential buyers coming to your buy-here, pay-here dealership — or current customers in your related finance company’s portfolio — who filed bankruptcy at some point since January.
The American Bankruptcy Institute said that total bankruptcy filings registered nationwide during the first six months of this year came in 12 percent lower than the figure reported through the first half of 2014.
According to data provided by Epiq Systems, filings completed between Jan. 1 and June 30 totaled 422,782, down from the 479,573 total filings reported during the same period a year ago.
Officials indicated the 407,764 total noncommercial filings for the first half of 2015 represented a-12 percent drop from the noncommercial filing total of 460,931 for the first half of 2014.
Total commercial filings during the first six months of the year came in at 15,018, representing a 19-percent decrease from the 18,642 filings during the same period a year ago.
Commercial Chapter 11 filings also fell during the first half of this year as the 2,576 filings represented a 15-percent drop from the 3,046 commercial Chapter 11 filings during the first six months of 2014.
“Bankruptcy filings through the first half of the year continue to recede amid sustained low interest rates and flat consumer debt levels,” ABI executive director Samuel Gerdano said.
“Total bankruptcies remain on a pace to total just over 800,000 for 2015,” Gerdano added.
The 69,723 total bankruptcy filings for the month of June constituted a 6-percent decrease compared to the 73,855 filings in June of last year.
The 67,293 total noncommercial filings for June generated a 5-percent dip from last June’s noncommercial filing total of 70,996.
Total commercial filings last month came in at 2,430, representing a 15-percent decrease from the 2,859 filings during the same period last year.
Commercial Chapter 11 filings registered a 24-percent decline as the 483 commercial Chapter 11 filings filed in June of last year fell to 366 last month.
ABI indicated the average nationwide per capita bankruptcy filing rate for the first six calendar months of 2015 decreased slightly to 2.72 (total filings per 1,000 per population) from the 2.73 rate for the first five months of the year. The average total filings per day in June were 2,324, a 6-percent drop-off from the 2,462 total daily filings in June of last year.
States with the highest per capita filing rate (total filings per 1,000 population) through the first six months of this year were:
1. Tennessee (5.68)
2. Alabama (5.20)
3. Georgia (4.89)
4. Illinois (4.51)
5. Utah (4.40)
ABI has partnered with Epiq Systems, a provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
