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Contact: Mana Zarinejad
(703) 739-0800 ext. 125

Bankruptcies Break Another Record in 1998
Personal Filings Have Increased 95 Percent Since 1990

March 1, 1999, Alexandria, Va.--The total number of bankruptcies filed during 1998 rose to 1,442,549, breaking the record set the previous year, according to data released today by the Administrative Office of the U.S. Courts. The number of new bankruptcies has set a record each of the last three calendar years.

Bankruptcies are up 84.2 percent since 1990, when bankruptcies totaled 782,960. Total filings in 1998 increased by 2.7 percent from 1997, when bankruptcies totaled 1,404,145.

Personal filings continue to drive the increase, climbing in 1998 to 1,398,182 filings, a 3.6 percent increase from 1997, when personal filings totaled 1,350,118. In all, personal bankruptcies are up 94.7 percent since 1990, when they totaled 718,107.

By contrast, business bankruptcies dropped 17.0 percent in 1998 to 44,367. Business filings totaled 54,027 in 1997. In all, business bankruptcies have decreased by 31.6 percent since 1990, when they totaled 64,853.

Personal bankruptcies represent 96.9 percent of all filings in 1998. They represented 91.7 percent of all filings in 1990.

The chapter* breakdown of personal filings is: 1,007,922 chapter 7s, 862 chapter 11s, and 389,398 chapter 13s. Chapter 7 bankruptcies represent 72.1 percent of all personal bankruptcies in 1998.

"This third consecutive record year of bankruptcies correlates closely with the increased debt load carried by American families," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute (ABI).

"The same consumer spending that helps to sustain the national economy can put households at risk of needing bankruptcy relief," he added.

Gerdano said the sustained increase in personal bankruptcies has led lawmakers in Congress to reexamine the U.S. bankruptcy laws. Last week legislation was introduced in the House of Representatives to reform the current Bankruptcy Code and curb the increase in personal filings by shifting some chapter 7 debtors into chapter 13.

The chapter breakdown of business filings is: 27,774 chapter 7s, 7,524 chapter 11s, 807 chapter 12s and 8,221 chapter 13s. 

For the quarter, there were 351,108 bankruptcies during the three-month period ending Dec. 31, 1998. Of those, there were 9,888 business filings and 343,220 personal filings. Regarding total filings, this is the second-largest three-month period and highest fourth quarter ever.

For statistics on a particular region or historical trends or to talk to someone in your area, contact ABI Public Affairs Coordinator Mana Zarinejad at (703) 739-0800 or at Statistics can also be retrieved online at

ABI is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters related to insolvency. ABI is not an advocacy group. Instead ABI was founded in 1982 to provide Congress, its members, journalists and the public-at-large with unbiased analysis of bankruptcy issues. The ABI membership includes more than 6,500 attorneys, bankers, judges, professors, lenders, turnaround specialists, accountants and other bankruptcy professionals providing a forum for the exchange of ideas and information. For additional information on ABI, visit ABI World at


Top  Districts With Highest Percentage Increases
in Filings From CY 1997 to CY 1998


Percentage Increase

1   Hawaii 30.6 %
2   District of Nevada 17.0 %
3   District of Utah 15.2 %
4   District of "District of Columbia" 14.0 %
5   District of North Dakota 11.8 %
6   Southern District of Florida 11.7 %
7   Northern District of Florida 11.6 %
8   Eastern District of North Carolina 11.5 %
8   Middle District of Pennsylvania 11.5 %
10 Eastern District of Washington 11.1 %
10 District of Wyoming 11.1 %


*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 whatever non-exempt property the debtor has and to give the individual debtor a fresh start through the discharge in bankruptcy.

Chapter 11 of the Bankruptcy Code is available for both consumer and business 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, typically used to budget some of the debtor’s future earnings under a plan through which creditors are paid in whole or in part.


Contact:    Mana Zarinejad
                 ABI Public Affairs Coordinator
                 (703) 739-0800 ext. 125

Web posted and Copyright © March 1, 1999, American Bankruptcy Institute.

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