44 Canal Center Plaza
Alexandria, VA 22314
FOR IMMEDIATE RELEASE
Contact: Pam Shepherd
Bankruptcy Filings Hit Record HighAgain
Break 1.5 Million Mark for 12-Month Period
May 16, 2002, Alexandria, Va. Bankruptcy filings broke the record for filings in any 12-month period, rising 15.1 percent in the 12-month period ending March 31, 2002, according to data released today by the Administrative Office of the U.S. Courts. Filings rose from 1,307,857 in the 12-month period ended March 31, 2001, to 1,504,806 in the same period in 2002. 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.
The total number of new bankruptcies filed during the first quarter of calendar year 2002 (Jan. 1 to March 31) rose 3.3 percent, increasing from 366,841 to 379,012 over the same period a year ago. The new mark is the highest first quarter ever, and the second highest three-month figure in history.
"The continued record-breaking pace of new bankruptcy filings will likely fuel new calls for legislation making bankruptcy less available," said American Bankruptcy Institute Executive Director Samuel J. Gerdano. "While the pending bill will ultimately reduce the scope of bankruptcy relief, in the short term it will push filings higher, as consumers race to take advantage of the current debtor-friendly law."
Of the 379,012 bankruptcy filings for the 3-month period ending March 31, the largest number of filings continues to be under chapter 7. Total chapter 7 filings for the first quarter were 265,128, a 1.7 percent increase from 260,692 in 2001. Chapter 13 filings, the next largest category, increased by 7.4 percent from 103,168 for the same period in 2001 to 110,835. Chapter 11 filings rose 2.06 percent from 2,961 to 3,022, spurred by a continuing number of large public company filings. Chapter 12 filings increased 41.6 percent from 12 to 17, in the quarter ending March 31, 2002. Chapter 12 expired on Oct. 1, 2001, but has been extended through the end of 2002 by the just-passed farm bill.
BUSINESS filings for the 3-month period ending March 31 totaled 9,775, which is down 2.3 percent from the 10,005 bankruptcy business cases filed in the same period in 2001. NON-BUSINESS filings increased 3.47 percent, from 356,836 in 2001 to 369,237 in 2002.
The chapter* breakdown of NON-BUSINESS filings for the 3-month period ending March 31, 2002, is: 259,447 chapter 7s, 261 chapter 11s, and 109,527 chapter 13s.
The chapter breakdown of NON-BUSINESS filings for the 12-month period ending March 31, 2002, is: 1,036,410 chapter 7s, 854 chapter 11s, and 427,693 chapter 13s.
Districts with the Highest Percentage INCREASE in Total Filings for the 3-month period ending March 31, 2002 (compared to the identical period in 2001)
1. District of Guam 74.6%
2. District of South Carolina 19.7%
3. Eastern District of Michigan 17.37%
4. Southern District of Indiana 16.4%
5. Western District of Wisconsin 16.3%
Districts with the Highest Percentage DECREASE in Total Filings for the 3-month period ending March 31, 2002 (compared to the identical period in 2001)
1. District of the Virgin Islands 37.5%
2. District of North Dakota 17.7%
3. District of Wyoming 17.16%
4. District of Delaware 15.9%
5. District of Puerto Rico 13.5%
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 debtors 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 individuals 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 debtors future earnings under a plan through which creditors are paid in whole or in part.