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Total Bankruptcy Filings Decline

December 3, 2004, Alexandria, Va. The total number of bankruptcies filed in federal courts declined 2.6 percent in the 12-month period ending September 30, 2004, according to data released today by the Administrative Office of the U.S. Courts. The total number of bankruptcy cases filed in this 12-month period totaled 1,618,987, down from the 1,661,996 bankruptcy cases filed for the same period in 2003. Despite the drop in filings, bankruptcies remain at historic highs, well above the 1.5 million record first set in 2002. Bankruptcy filings first broke one million during the 12-month period ending June 30, 1996.

Business bankruptcies fell 3.8 percent to 34,817 in the 12-month period ending September 30, 2004, down from the 36,183 filings in the same period in 2003. Non-business (personal bankruptcies) fell 2.6 percent in the same 12-month period, totaling 1,584,170 in 2004, down from the 1,625,813 filings in the 12-month period ending September 30, 2003.

“The drop in consumer cases reflects recent declines in consumer credit delinquencies and credit card defaults,” said Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute. “Business conditions have benefited from low interest rates and easier access to credit.”

Bankruptcy filings under chapters 7, 12 and 13 fell in the 12 month period ending September 30, 2004. Only chapter 11 filings rose over the same period in 2003.  Chapter 7 filings in the 12 month period ending September 20, 2004 totaled 1,153,865, down 2 percent from the 1, 177,292 cases filed in the same period in 2003. In the 12 month period ending September 30, 2004 chapter 12 filings totaled 238, falling 65.9 percent from the 698 cases filed in the same period in 2003. The low number of filings in 2004 was most likely due to the lapse in December 2003 of chapter 12. Filings under chapter 13 in the 12 month period ending September 30, 2004 fell 4.1 percent to 454,412 from the 473,763 filings in the same period in 2003. Chapter 11 filings totaled 10,368 in the 12 month period ending September 30, 2004, up 2.2 percent from the 10,144 chapter 11 bankruptcies filed in the same period in 2003.

BUSINESS FILINGS for the 3-month period ending September 30, 2004, totaled 7,574, down 10.3 percent from the 8,446 bankruptcy business cases filed in the same period in 2003. NON-BUSINESS FILINGS for the 3-month period ending September 30, 2004, decreased 3.9 percent from 404,543 in 2003 to 388,864 in 2004.

The chapter* breakdown of BUSINESS filings for the 3-month period ending September 30, 2004, is: 4,990 chapter 7s, 1,383 chapter 11s, 9 chapter 12s and 1,178 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 3-month period ending September 30, 2004, is: 274,196 chapter 7s, 213 chapter 11s and 114,454 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending September 30, 2004 (compared to the identical period in 2003):

  1. Southern District of New York: 20.6%
  2. District of Colorado: 10.4%
  3. Southern District of West Virginia: 8.7%
  4. District of Guam: 8.2%
  5. Middle District of Louisiana: 7.9%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending September 30, 2004 (compared to the identical period in 2003):

  1. District of the Virgin Islands 28.3%
  2. Central District of California 18.5%
  3. District of Hawaii 17.2%
  4. District of Columbia 16.5%
  5. District of Northern Mariana Islands 15 %

More information will be available on Monday at ABI’s Statistics Page.

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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 over 10,300 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. 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 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 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 debtor’s future earnings under a plan through which unsecured creditors are paid in whole or in part.

 

 

 


 

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