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FOR IMMEDIATE RELEASE                               

 

Contact: Rali Mileva          

(703) 739-0800

rmileva@abiworld.org

 

 

Personal Bankruptcy Filings Continue to Break Records

November 14, 2003, Alexandria, Va. --The number of non-business (personal) bankruptcies filed in federal court in fiscal year 2003, the 12-month period ending September 30, 2003, continued to increase, while business bankruptcy filings declined, according to data released today by the Administrative Office of the U.S. Courts. Total bankruptcy filings remain at historic highs. There were 1,661,996 bankruptcies filed in fiscal year 2003, up 7.4 percent from the 1,547,669 filings in fiscal year 2002. This is the highest-ever total of filings for any reporting period. Since 1994, when filings totaled 837,797, bankruptcies have almost doubled, increasing 98 percent.

Non-business (personal) bankruptcies grew 7.8 percent in the same 12-month period, totaling 1,625,813 in fiscal year 2003 and 1,508,578 in the 12-month period ending September 30, 2002. Non-business bankruptcies now account for 97.8 percent of all bankruptcies filed in federal courts. The 412,989 total filings during the third quarter is a record for the July-Sept. period and the second highest 3-month period ever, surpassed only by the 440,257 total filings during the second quarter of this year.

"Bankruptcy filings are notorious for lagging the general economy," said Samuel J. Gerdano, ABI Executive Director. "This year's third quarter figure -- a record -- reflects the build up of heavy consumer debt in the late 1990s and the soft employment numbers of 2002, " he said.

However, business bankruptcies fell 7.4 percent to 36,183 in fiscal year 2003, down from 39,091 in fiscal year 2002.

Filings under chapters 7, 12 and 13 increased in the 12-month period ending September 30, 2003. Only chapter 11 filings fell below fiscal year 2002 totals. Chapter 7 filings in fiscal year 2003 totaled 1,177,292, up 8.6 percent from the 1,084,336 filings in fiscal year 2002. In the 12-month period ending September 30, 2003, chapter 12 filings totaled 698, rising 116.8 percent from the 322 cases filed in the same time period ending September 30, 2002. This surge in filings likely arose from the retroactive extension of provisions for filing under this chapter, which has occurred several times since provisions for filing under chapter 12 first expired in 2000. Filings under chapters 13 in fiscal year 2003 rose 5 percent to 473,763, up from 451,258 in fiscal year 2002. Only chapter 11 filings were down 13 percent from the 11,669 filings in 12-month period ending September 30, 2002, totaling 10,144 in fiscal year 2003.

BUSINESS FILINGS for the 3-month period ending September 30, 2003, totaled 8,446, down 10.5 percent from the 9,433 bankruptcy business cases filed in the same period in 2002. NON-BUSINESS FILINGS for the 3-month period ending September 30, 2003 increased 3.2 percent from 391,873 in 2002 to 404,543 in 2003.

The chapter* breakdown of BUSINESS filings for the 3-month period ending September 30, 2003, is: 5,079 chapter 7s, 2,033 chapter 11s, 74 chapter 12s and 1,248 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 3-month period ending September 30, 2003, is: 287,187 chapter 7s, 235 chapter 11s and 117,119 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending September 30, 2003 (compared to the identical period in 2002):

1. District of Colorado 24.3%
2. Southern District of Texas 21.4%
3. Eastern District of Michigan 20.6%
4. Eastern District of Wisconsin 18.6%
5. Northern District of Oklahoma 18.4%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending September 30, 2003 (compared to the identical period in 2002):

1. District of Northern Mariana Islands 28.6%
2. District of Hawaii 16.6%
3. District of Guam 14.3%
4. District of Virgin Islands 10.2%
5. Central District of California 6.7%

More information is available at http://www.abiworld.org/stats/newstatsfront.html.

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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 more than 9,500 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 at http://www.abiworld.org. 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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