The economic recession has resulted in an number of defaults on credit cards, student loans, bank loans, lines of credit and of course mortgage loans.  And the trickle down effects of the downturn in the economy are likely going to be felt for some time to come as more and more borrowers struggle to get out debt, hold on to their jobs and ride out the storm.

One of the common approaches to erasing debt is bankruptcy and, according to news reports, California leads the way. The bankruptcy court district that includes filings for all of Orange County California recently reported it had 36,459 bankruptcy filings during the second quarter, more than two and a half times the number of the second-highest district, which is also in California, according to the Orange County Register. The only court districts nationwide that had five-digit filings in the second quarter are:

·         Central District California: 36,459

·         Eastern District California: 13,300

·         Northern District Georgia: 13,244

·         Middle District Florida: 13,052

·         Arizona: 10,835

·         New Jersey: 10,089

Bankruptcy filings have been declining in most areas this year, according to the American Bankruptcy Instituted. In October, consumer filings nationwide, 106,255, is down 19.6% from a year ago.

"The declining filings correlate to tightened consumer spending and the overall pull back in consumer credit associated with a stagnant economy," said ABI Executive Director Samuel J. Gerdano. "We expect total 2011
consumer filings to be less than 2010."

However, according to the Register, these lower numbers trail almost five years of steady increases and California has seen particularly high numbers.

In the second quarter of 2006, the Central District of California – which stretches from San Luis Obispo County to the Arizona border – had 4,355 bankruptcies in the second quarter. Five court districts nationwide had higher bankruptcy filings even though their populations were lower.

The National Bankruptcy Research Center looks at the number of bankruptcies per million population and says the data vary widely from state to state and county to county. The states with the lowest bankruptcies per million are rural except for Texas.

Within California, "San Bernardino, and Riverside (counties) underscore the continuing high filing rates in California," the NBRC says.

Among urban counties, Riverside ranks second with 11,764 in the first nine months of 2011 and San Bernardino ranks fourth with 11,061. The national average is 5,000, NBRC says.

"Probably the most interesting point of variation comes from comparing New York to California," NBRC told the Register. "Though the financial crisis largely originated in New York, the state feels the effects in bankruptcy filings much less than California.

"For example, at the state level, filings in New York are about 2,650 per million (population), approximately half the national average; filings in California are more than 40% above the national average (7,200 per million).

"Similarly, among large cities, New York has one of the lowest filing rates in the nation (1,500 per million), while Riverside and San Bernardino in California both have filing rates more than twice the national average (above 11,000 per million). "

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