Bankruptcies Reach Second Highest
Three-Month Period in History
May 23, 2001, Alexandria, Va. — The number of bankruptcies filed
during the first quarter of calendar year 2001 (Jan. 1 to March 31) rose 17.5
percent over the same period a year ago.
Filings rose from 312,335 to 366,841, according to data released today
by the Administrative Office of the U.S. Courts. The figure is the highest-ever for a first quarter and is
surpassed in the number of quarterly filings only by the second quarter of 1998
(April 1 to June 30, 1998), when 373,460 new cases were filed.
“The economic slowdown beginning last
fall, combined with historic high levels of consumer debt, mean that filings
will reach a new peak this year,” said Samuel J. Gerdano, Executive
Director of the American Bankruptcy Institute (ABI).
The total bankruptcy filings for the quarter ending March 31 slipped
slightly from a 10-year high when they reached 1,423,123 in March 1998, but the
total remains well above the one-million mark.
The total number of bankruptcy petitions filed rose a slight 0.5 percent
in the 12-month period ending March 31, from 1,301,205 to 1,307,857.
The first quarter 2001 statistics show a significant increase in consumer
filings and a modest increase in business filings. The statistics also show that the workload per judgeship has
increased substantially from 3,007 filings to 4,037.
“Bankruptcy judges, as well as U.S. Trustees, are simply overworked and the
system overtaxed,” said Prof. Jack F. Williams, the Robert M. Zinman Resident
Scholar at ABI. “The recent sharp rise
in chapter 7 filings may also suggest that debtors and debtors’ attorneys may
be engaging in opportunistic behavior; that is, employing the chapter 7 filing
option now before that option is largely foreclosed by the new bankruptcy
Of the total number of bankruptcy filings for the 12-month period
ending March 31, there were 904,397 chapter 7 filings, a 0.5 percent decrease
from 908,802 chapter 7 bankruptcies filed in the same period in 2000. The next largest group of filings is chapter
13. These increased by 3 percent from
381,568 for the same period in 2000 to 393,033. Chapter 11 filings increased 0.7 percent from 10,071 to
10,139. Chapter 12 filings saw a
significant decrease, falling 66.4 percent in the 3-month period from to 739 to
248. This drop is mainly due to the
expiration of chapter 12 on July 1, 2000.
Of the total number of bankruptcy filings for the 3-month period
ending March 31, chapter 7 filings increased by 21 percent from 215,454 to 260,692. Chapter 13 filings also saw an increase
during the first quarter. They rose by
10 percent from 94,007 to 103,168.
Chapter 11 filings showed a 10 percent increase from 2,699 to
2,961. And as in the 12-month filings,
chapter 12 drastically decreased by 93 percent from 169 in the first quarter
2000 to 12 in the first quarter 2001.
The chapter* breakdown of non-business filings for the 12-month period
ending March 31, 2001, is: 1,271,865 chapter 7s, 711 chapter 11s, and 387,565
The chapter breakdown of non-business filings for the 3-month period
ending March 31, 2001, is: 254,895 chapter 7s, 191 chapter 11s, and 101,750
Districts with the Highest Percentage
INCREASE in Total Filings
From January 1, 2001 to March 31, 2001 (compared to the same period in 2000)
- District for the Northern Mariana Islands 50%
- Eastern District of North Carolina 40%
of Mississippi 40%
- Western District of Arkansas 38.2%
- Eastern District of Arkansas 37.4%
- Middle District of Tennessee 33.3%
Districts with the Highest Percentage DECREASE in Total Filings
From January 1, 2001 to March 31, 2001
(compared to the same period in 2000)
- District of Delaware 26%
- District of the Virgin Islands 11.1%
- Northern District of New York 9%
- Northern District of California 8.8%
- Southern District of California 2.4%
More information will be available on Friday
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 7,800 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
*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
Chapter 12 of the Bankruptcy Code is designed to give special
debt relief to a family farmer with regular income from farming. Chapter 12 expired on June 30, 200,0 and was
not reenacted until May 11, 2001.
Chapter 13 of the Bankruptcy Code is
available for an individual with regular income whose debts do not exceed
specific amounts; typically used to budget some of the debtor’s future earnings
under a plan through which creditors are paid in whole or in part.