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FOR IMMEDIATE RELEASE
Contact: Mana Zarinejad
(703) 739-0800 ext. 125

Quarterly Bankruptcy Filings
Post Significant Drop
Data Show Bankruptcies May Be Leveling Off

May 24, 1999, Alexandria, Va.—The total number of new bankruptcies filed during the first three months of 1999 dropped to 330,784, posting the lowest number of filings since the final quarter of 1996, according to data released by the Administrative Office of the U.S. Courts.

The number of bankruptcies filed during the 12-month period ending March 31, 1999 totaled 1,419,199, a slight drop of 0.3 percent from the previous 12-month period, when filings totaled 1,423,128. Total bankruptcies for the 12-month period mark the first decrease since the identical period in 1996.

The statistics are released as the Senate plans to consider S. 625, the "Bankruptcy Reform Act of 1999," legislation targeting the increase in bankruptcy filings over the past several years. The House passed a similar bill earlier this month.

Personal bankruptcies for the quarter decreased to 321,604 (down by 5.9 percent when compared to the first quarter of 1998), and personal filings for the 12-month period ending March 31 increased by a fraction of a percent to 1,378,071.

"While bankruptcies are still high, the leveling off in the rate of growth may be the first sign in an actual decline," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute.

Business bankruptcies continued their decline in the first quarter, consistent with the health of the national economy, dropping to 9,180, a 21.9 percent decrease from the same three-month period in 1998. Business filings decreased during the 12-month period ending March 31 to 41,128, a 21.9 percent drop from the previous 12-month period.

The chapter* breakdown of personal filings for the first quarter is: 228,285 chapter 7s, 155 chapter 11s, and 93,164 chapter 13s. Chapter 7 bankruptcies represent 71.0 percent of all personal bankruptcies during the quarter.

The chapter breakdown of personal filings for the 12-month period ending March 31 is: 991,238 chapter 7s, 788 chapter 11s, and 386,045 chapter 13s. Chapter 7 bankruptcies represent 71.9 percent of all personal bankruptcies during the 12-month period.

The chapter breakdown of business filings for the first quarter is: 5,640 chapter 7s, 1,784 chapter 11s, 266 chapter 12s, and 1,481 chapter 13s.

The chapter breakdown of business filings for the 12-month period ending March 31 is: 25,811 chapter 7s, 7,222 chapter 11s, 859 chapter 12s, and 7,200 chapter 13s.

For statistics on a particular region or historical trends or to talk to someone in your area, contact ABI Public Affairs Coordinator Mana Zarinejad at (703) 739-0800 or at mana@abiworld.org. Statistics can also be retrieved online at http://www.abiworld.org/stats/newstatsfront.html.

 

Top Districts With Highest Percentage Decreases
in Filings From
April 1, 1998 through March 31, 1999

District

Percentage Decrease

1   Northern District of Alabama -10.7 %
2   District of Massachusetts -10.6 %
3   Northern District of Mississippi - 9.2 %
4   District of Minnesota - 8.7 %
5   Western District of Tennessee - 7.5%

 

Top Districts With Highest Percentage Increases
in Filings From April 1, 1998 through March 31, 1999

District

Percentage Increase

1   Hawaii 25.6 %
2   District of North Dakota 15.7 %
3   District of Nevada 13.8 %
4   Northern District of Florida 10.3 %
5   Eastern District of North Carolina 9.0 %

ABI is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters related to insolvency. ABI is not an advocacy group. Instead ABI was founded in 1982 to provide Congress, its members, journalists and the public-at-large with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 7,000 attorneys, bankers, judges, professors, lenders, turnaround specialists, accountants 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.


*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 whatever non-exempt property the debtor has and to give the individual debtor a fresh start through the discharge in bankruptcy.

Chapter 11 of the Bankruptcy Code is available for both consumer and business 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, typically used to budget some of the debtor’s future earnings under a plan through which creditors are paid in whole or in part.

###

Contact:    Mana Zarinejad
                 ABI Public Affairs Coordinator
                 (703) 739-0800 ext. 125
                 mana@abiworld.org         

Web posted and Copyright © May 24, 1999, American Bankruptcy Institute.


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