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ABI PRESS RELEASES

BANKRUPTCY FILINGS REACH ANOTHER RECORD HIGH;
INCREASE FOR SIXTH STRAIGHT QUARTER


Contact: Scott Relyea
or Michele Parisi
at (703) 739-0800

ALEXANDRIA, Va., August 15, 1997 — Bankruptcy filings across the country continued to climb during the second quarter of 1997, reaching 367,168 for the three-month period ended June 30, 1997, according to figures released today by the Administrative Office of the U.S. Courts. This is the sixth successive quarter filings have increased, jumping nearly 10 percent over the first quarter of 1997 and by 23.6 percent as compared with the second quarter of 1996.

Continuing to drive the surge, non-business filings again reached an all-time high at 353,177, comprising 96.2 percent of all filings. The total number of bankruptcy filings for the first six months of 1997, which stood at 702,241, is greater than total filings for all of calendar year 1989 (679,461). Consumer filings in 1989 represented just 90.7 percent of all filings.

Business filings for the second quarter of 1997 increased by 1.2 percent over the first quarter, standing at 13,991, but held steady with the second quarter of 1996, which saw 13,992 businesses file for bankruptcy.

"The dramatic growth in consumer filings over the past two years is reflective of both the economy and the credit culture in this country," noted Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute. "Individuals during an apparently strong economy are prone to spend slightly beyond their means, and ultimately find themselves unable to cover their increasingly unwieldy debts."

Consumer filings have jumped 60 percent from the third quarter of 1995 to the second quarter of 1997, increasing by more than 130,000.

During the second quarter, Chapter 7 filings represented more than 70 percent of all non-business filings; the 255,696 chapter 7 petitions for the period represented a 27.4 percent increase over the second quarter of 1996. Chapter 7 of the Bankruptcy Code affords an individual debtor a "fresh start," as his or her unsecured debt is discharged and the individual debtor is allowed to retain some exempt property, while the remaining assets are sold and distributed to secured creditors.

Comparing the 12-month period ended June 30, 1997, with the 12 months ended June 30, 1996, bankruptcy filings increased by more than 10 percent in each of the 94 judicial districts of the country except the Southern District of Alabama and the District of the Northern Mariana Islands. Comparing the second quarter of 1997 with the second quarter of 1996, the greatest increase (77.2 percent) occurred in the District of Massachusetts, where filings rocketed from 4,621 during the three months ended June 30, 1996, to 8,190 during the same period in 1997, with the Northern and Southern Districts of West Virginia close behind (at 67.3 percent and 56.9 percent, respectively) .

The Central District of California continues to see the greatest number of filings, reporting 31,121 for the second quarter of 1997. Three other districts registered more than 10,000 filings during this period: the Northern District of Illinois, the Middle District of Florida, and the District of New Jersey.

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 5,700 attorneys, bankers, judges, professors, turnaround specialists, accountants and other bankruptcy professionals providing a forum for the exchange of ideas and information. For more information on ABI, visit ABI World at http://www.abiworld.org.

For information and statistics collected especially for the media and other researchers, visit http://www.abiworld.org/media/media.html.

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