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FOR IMMEDIATE RELEASE                               

 

Contact: Rali Mileva          

(703) 739-0800

rmileva@abiworld.org

 

 

Bankruptcy Filings Hit Historic Highs

November 25, 2002, Alexandria, Va. - - New bankruptcies filed during the third quarter of 2002 and for the past 12 months broke records again, according to data released today by the Administrative Office of the U.S. Courts. Bankruptcy cases for fiscal year 2002 totaled 1,547,669, up 7.7 percent from the 1,437,354 bankruptcy filings for fiscal year 2001. Non-business filings (consumer cases), which make up the majority of bankruptcy filings, also broke records with a total of 1,508,578, up 7.8 percent from the fiscal year 2001 filings. Business filings in the 12-month period ending Sept. 30, 2002, totaled 39, 091, up 1.6 percent from the same period in 2001. The Judiciary's fiscal year is the twelve-month period from Oct. 1 through Sept. 30.

Filings in the 3-month period ending Sept. 30, 2002, were 401,306, up 12 percent from the same period in 2001. This is the highest 3-month total in U.S. history.

"Another national record in personal bankruptcy filings at the end of this year could help fuel renewed calls for changes in the bankruptcy law," said Samuel J. Gerdano, ABI Executive Director. "Total filings for the third quarter this year are up 30 percent from the same period just two years ago, reflecting the hangover of debt built up during the 1990s," he said.

Of the 401,306 total bankruptcy filings for the 3-month period ending Sept. 30, the largest number of filings continues to be under chapter 7. Total chapter 7 filings for the third quarter were 280,999, a 12.2 percent increase from 250,400 in 2001. Chapter 13 filings, the next largest category, increased by 10.2 percent from 106,475 for the same period in 2001 to 117,425 in 2002. Chapter 11 filings increased 11.2 percent from 2,442 to 2,717. Chapter 12 filings decreased 22.2 percent from 194 in 2001 to 151 in 2002, in the quarter ending Sept. 30, 2002.

BUSINESS filings for the 3-month period ending Sept. 30 totaled 9, 433, down 1.0 percent from the 9,537 bankruptcy business cases filed in the same period in 2001. NON-BUSINESS filings for the 3-month period ending Sept. 30, increased 11.9 from 349,981 in 2001 to 391,873 in 2002.

The chapter* breakdown of NON-BUSINESS filings for the 3-month period ending Sept. 30, 2002, is: 275,594 chapter 7s; 245 chapter 11s; and 116,033 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 12-month period ending Sept. 30, 2002, is: 1,061,762 chapter 7s; 967 chapter 11s; and 445,844 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending September 30, 2002 (compared to the identical period in 2001)

1. District of Guam 76.9%
2. District of Utah 45.5%
3. District of the Northern Mariana
Islands 40.0%
4. Southern District of Alabama 39.9%
5. Middle District of Alabama 36.6%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending September 30, 2002 (compared to the identical period in 2001)

1. District of the Virgin Islands 14.4%
2. District of North Dakota 9.3%
3. District of Hawaii 5.8%
4. Southern District of West Virginia 4.5%
5. Eastern District of Louisiana 4.2%

More information will be available tomorrow at http://www.abiworld.org/stats/newstatsfront.html.

ABI is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 9,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit ABI World at http://www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.


*Definitions from Bankruptcy Overview: Issues, Law and Policy, by the American Bankruptcy Institute

Chapter 7 of the Bankruptcy Code is available to both individual and business debtors. Its purpose is to achieve a fair distribution to creditors of the debtor's available non-exempt property. Unsecured debts not reaffirmed are discharged, providing a fresh financial start.

Chapter 11 of the Bankruptcy Code is available for both business and consumer debtors. Its purpose is to rehabilitate a business as a going concern or reorganize an individual's finances through a court-approved reorganization plan.

Chapter 12 of the Bankruptcy Code is designed to give special debt relief to a family farmer with regular income from farming.

Chapter 13 of the Bankruptcy Code is available for an individual with regular income whose debts do not exceed specific amounts; it is typically used to budget some of the debtor's future earnings under a plan through which creditors are paid in whole or in part.

 


 

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