FOR IMMEDIATE RELEASE                               

 

Contact: Pam Shepherd          

(703) 739-0800

pshepherd@abiworld.org

 

 

Bankruptcy Cases Total More Than 1.5 Million for First Time

Personal and Quarterly Filings Hit Historic Highs

August 14, 2002, Alexandria, Va. — New bankruptcies filed during the second quarter of 2002 and for the past 12 months set all time records, according to data released today by the Administrative Office of the U.S. Courts.  The 1,505,306 new cases is the first time filings have totaled over 1.5 million in a 12-month period.  Filings increased 8.6 percent from a total 1,386,606 bankruptcy cases filed in the 12-month period ending June 30, 2001.  The previous highest total of filings for any 12-month period was in the 12-month period ending Dec. 31, 2001, with a total of 1,492,129.

Filings in the 3-month period ending June 30, 2002, were 400,686, the highest single quarter in history, breaking a mark set last June of 400,394 total cases filed. 

“Bankruptcy filing records are like pie crusts: made to be broken,” said Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute.  “Both individuals and public companies are working through the difficult fallout from the debt binge of the 1990s and there’s no early end in sight.” 

Of the 400,686 total bankruptcy filings for the 3-month period ending June 30, the largest number of filings continues to be under chapter 7.  Total chapter 7 filings for the second quarter were 286,584, a 2.3 percent decrease from 293,228 in 2001.  Chapter 13 filings, the next largest category, increased by 6.8 percent from 104,154 for the same period in 2001 to 111,193.  Chapter 11 filings declined 4 percent from 2,832 to 2,731.  Chapter 12 filings decreased 14.3 percent from 160 to 137, in the quarter ending June 30, 2002.  Chapter 12 expired on Oct. 1, 2001, but has been extended through the end of 2002 by the recently passed farm bill. 

BUSINESS filings for the 3-month period ending June 30 totaled 9,695, down 6.4 percent from the 10,330 bankruptcy business cases filed in the same period in 2001.  NON-BUSINESS filings for the 3-month period ending June 30 increased less than one percentage point (0.2 percent), from 390,064 in 2001 to 390,991 in 2002.

The chapter* breakdown of NON-BUSINESS filings for the 3-month period ending June 30, 2002, is: 280,891 chapter 7s; 254 chapter 11s; and 109,843 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 12-month period ending June 30, 2002, is: 1,030,372 chapter 7s; 894 chapter 11s; and 434,835 chapter 13s.

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

 

1. District of Guam                               93.5%

2. Eastern District of Michigan              22.8%

3. Northern District of Indiana               19.8%

    District of Arizona                             19.8%

4. District of Utah                                 19.2%

5. Southern District of Iowa                  18.7%

 

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

1. District of the Virgin Islands             16.2%

2. District of Puerto Rico                      6.5%

3. District of Wyoming                          6.3%

4. District of North Dakota                   4.8%

    District of Alaska                              4.8%

5. Southern District of West Virginia     3.9%

 

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 8,600 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.

###