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FOR IMMEDIATE RELEASE                               

Contact: Rali Mileva          

(703) 739-0800

rmileva@abiworld.org

Bankruptcy Cases Continue to Break Records

August 18, 2003, Alexandria, Va. -- The total number of bankruptcies and the total number of non-business (personal) bankruptcy cases filed in the 12-month period ending June 30, 2003, once again broke records, according to data released today by the Administrative Office of the U.S. Courts. Filings increased 9.6 percent from 1,505,306 bankruptcy cases filed in the 12-month period ending June 30, 2002, to 1,650,279 filed in the same period ending on June 30, 2003, the largest number of cases ever filed in any 12-month period. Non-business (personal) bankruptcy filings also reached an all-time high for any 12-month period.

Non-business filings totaled 1,613,097 for the 12-month period ending June 30, 2003, up 10 percent from the 1,466,105 cases filed in the 12-month period ending June 30, 2002. In the same period, business filings fell by 5.2 percent to 37,182 from 39,201 in 2002. The 440,257 total filings during the second quarter are the most ever in a 3-month period, surpassing the 412, 968 cases filed during the first quarter of this year.

"The latest bankruptcy record reflects the continuing hangover from the binge consumer spending and consumption of the late 1990s," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute. "Consumers, aided by historic low interest rates, helped make the last recession a shallow one, but at the cost of adding to already high household debt burdens. This can lead borrowers to consider bankruptcy as a solution to their debt problems."

Filings increased under the following bankruptcy chapters in the 12-month period ending June 30, 2003. Chapter 7 increased by 10.7 percent from 1,053,230 chapter 7 filings in the 12-month period ending June 30, 2002, to 1,165,993 chapter 7 filings for the same period ending June 30, 2003. The next largest group of filings were chapter 13 filings at 472,811, a 7.4 percent increase over the 440,231 filings in the 12-month period ending June 30, 2002. Chapter 12 filings rose 111.2 percent, from 367 in the 12-month period ending June 30, 2002, to 775 in the same 12-month period in 2003. Only chapter 11 filings fell 7 percent, decreasing from 11,401 in 2002 to 10,602 in 2003.

BUSINESS FILINGS for the 3-month period ending June 30, 2003, totaled 9,331, down 3.7 percent from the 9,695 bankruptcy business cases filed in the same period in 2002. NON-BUSINESS FILINGS for the 3-month period ending June 30, 2003 increased 10.2 percent from 390,991 in 2002 to 430,926 in 2003.

The chapter* breakdown of BUSINESS filings for the 3-month period ending June 30, 2003, is: 5,383 chapter 7s, 2,348 chapter 11s, 279 chapter 12s and 1,293 chapter 13s. The chapter breakdown of NON-BUSINESS FILINGS for the 3-month period ending June 30, 2003, is: 312,221 chapter 7s, 251 chapter 11s, and 118,452 chapter 13s.

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

1. District of Colorado 26%
2. Eastern District of Michigan 23.8%
3. Southern District of Texas 23.6%
4. Eastern District of Wisconsin 20.4%
5. Eastern District of Oklahoma 20.2%

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

1. District of Northern Mariana Islands 33.3%
2. District of Hawaii 13%
3. District of Guam 11.2%
4. Central District of California 3.4%
5. Southern District of California 2.3%

More information will be available tomorrow 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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