November 23, 1998, Alexandria, Va.—The total number of bankruptcies filed during
the year ending Sept. 30 totaled 1,436,964, up 5.1 percent from the same 12-month period
in 1997, according to data released Monday by the Administrative Office of the U.S.
Courts.
Personal filings continue to drive the increase. Total personal bankruptcies, which
accounted for 96.7 percent of all filings during the 12-month period, increased by 5.8
percent to 1,389,839.
By contrast, business bankruptcies decreased by 15.1 percent to 47,125.
"Continued high levels of consumer spending and debt have led to sustained high
rates of bankruptcies," said Samuel J. Gerdano, executive director of the American
Bankruptcy Institute (ABI). "That 1998 will set another record of personal
bankruptcies ensures that Congress will continue to take a hard look at the Bankruptcy
Code," he added.
The rising number of personal bankruptcies has led many members of Congress to question
the current language of the Bankruptcy Code. Bankruptcy reform legislation died during the
last session of the 105th Congress, but is likely to be reconsidered this
spring.
A major issue of the legislation is whether some debtors who have the ability to repay
a portion of their debts in chapter 13* (repayment of debts through future income) of the
Code instead file chapter 7 (liquidation of assets to repay debts). In the 12-month period
ending Sept. 30, a total of 996,905 petitions, or 71.7 percent, were filed under chapter 7
while 392,053 petitions, or 28.2 percent, were filed under chapter 13.
ABI will release results of a study on the ability of individual debtors to repay debts
in chapter 13 rather than chapter 7 on Tuesday, Dec. 1, at 10 a.m. in Room 2237 of the
Rayburn House Office Building in Washington.
For the quarter ending Sept. 30, the total number of bankruptcies decreased slightly,
the first drop this year, to 361,205 total filings, a 3.4 percent drop from the second
quarter.
To date this calendar year, there have been 1,088,733 bankruptcies, outpacing record
filings in 1997. Bankruptcy filings surpassed 1.4 million in 1997, with 1,055,756 in the
nine-month period ending Sept. 30, 1997.
The total number of personal bankruptcies decreased the third quarter during by 11,049,
or 3.2 percent, to 350,859. Of those, the breakdown is as follows: 251,099 chapter 7s; 201
chapter 11s; and 99,559 chapter 13s.
The total number of business filings during the third quarter decreased by 1,206, or
11.7 percent, to 10,346 filings, during the third quarter of the calendar year. Of those,
the breakdown is as follows: 6,529 chapter 7s; 1,789 chapter 11s; 222 chapter 12s; and
1,798 chapter 13s.
Last month, a study of public companies in bankruptcy showed a 57 percent increase in
large chapter 11 cases.
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 mana@abiworld.org. Statistics can also be retrieved
online at
