What does this indicator measure?

This indicator measures the number of bankruptcies in the Dallas area, as reported by RAND Texas.

Why is this indicator important?
An individual or business goes into bankruptcy, whether voluntarily or involuntarily, when it is deemed unable to repay its creditors the amounts owed to them.  The purpose of bankruptcy is to allow a debtor to repay its creditors in an orderly fashion to the extent to which it is able.  Certain assets of the debtor are exempt from being utilized to repay creditors.  

The number and rate of bankruptcies is an indicator of how successfully individuals and businesses are managing their debt burden.  A high rate of bankruptcies is indicative of either excessive accumulation of debt or an economic reversal that makes it difficult for the debt to be repaid on time.

As consumer debt—in the form of home mortgages, auto loans, and credit cards—continues to rise, an increase in personal bankruptcies is to be expected.  However, business bankruptcies are driven more by business cycle fluctuations than by excessive debt accumulation.  Regardless of the root cause, rising bankruptcies can be expected when the local economy slows or stagnates, making it difficult for entities to service their debt. 

How are we doing?
The number of bankruptcies in the Dallas area has grown significantly in the last 5 years, from approximately 47,000 in 2000 to over 78,000 in 2004.

• The number of personal bankruptcies increased from 44,714 in 2000 to 75,167 in 2004, a 68% increase.
• The number of business bankruptcies increased from 2,337 in 2000 to 3,194 in 2004, a 37% increase.

The rate of bankruptcies varies significantly by county within the counties included in Dallas Indicators.

• Collin County had the highest rate of bankruptcies—6.2 per 1,000 persons in 2003.  Interestingly, Collin County also has the highest median family income in the Dallas area.
• Henderson (5.6), Ellis (5.3), and Rockwall (5.0) Counties all had bankruptcy rates of at least 5.0 per 1,000 population.
• Kaufman (4.9), Dallas (4.7), and Denton (4.3) Counties had bankruptcy rates below 5.0.
• Hunt County, with the second lowest median family income in the area, had the lowest bankruptcy rate of only 2.8 per 1,000 population.                                                                                           

See also data for:
  Collin County
  Denton County