Bankruptcy filings are drying up at a level not seen in at least two decades and there’s no telling for sure when — or if — that phenomenon will stop.
An analysis of the latest filing figures reveals bankruptcy actions are plummeting more than 70 percent.
Powering that nose dive is the law Congress enacted to make it much harder for people to abuse the system by declaring bankruptcy to avoid paying their debts.
That remains to be seen. For now, though, the early numbers appear to demonstrate how a new and tough federal law can quickly crimp a financial bailout procedure that had become a way of life .
The numbers compiled by New Jersey Lawyer from numerous reports of the Administrative Office of the U.S. Courts show that during the second quarter of the federal fiscal year — January, February and March — the bottom fell out of personal and business bankruptcy filings in New Jersey and to a slightly less extent in the bankruptcy courts dotting the nation.
In New Jersey, filings tumbled close to 75 percent when compared to the corresponding second quarters of the five previous years.
Nationwide there were 70 percent fewer filings than the same January-to-March period during each of the prior five years