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Contact: John Hartgen
             703-739-0800
             jhartgen@abiworld.org

FEBRUARY CONSUMER BANKRUPTCY FILINGS INCREASE 15 PERCENT

March 3, 2008, Alexandria, Va. U.S. consumer bankruptcy filings increased more than 15.2 percent nationwide in February over the previous month, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). Overall consumer filings totaled 76,120 in February, up from the 66,050 consumer filings recorded in January. The figure was also up 37.3 percent from February 2007. Chapter 13 filings constituted 36.4 percent of all consumer cases in February, down slightly from last month.  

“February's bankruptcy spike -- the highest single month since the 2005 law changes -- forecasts the start of more to come for the balance of 2008,” ABI Executive Director Samuel J. Gerdano.

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ABI is the largest multi-disciplinary, nonpartisan 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 11,700 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 www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.

NBKRC is an online research center that offers subscribers access to up-to-date research and statistics on bankruptcy filings. The database contains complete information dating back to 1995. For more information on NBKRC, please visit http://www.nbkrc.com.

*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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