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ABI PRESS RELEASES

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BIGGEST QUARTER EVER FOR U.S. BANKRUPTCY FILINGS;
26 PERCENT INCREASE OVER FIRST QUARTER 1996

ALEXANDRIA, Va., June 10, 1997—Continuing the recent upward surge in bankruptcy filings, the first three months of 1997 recorded the greatest number of filings ever in a single quarter—335,073, according to figures released yesterday by the Administrative Office of the U.S. Courts.

This peak, which is greater than the total number of bankruptcy filings during calendar year 1980, represents an increase of 26 percent over the first quarter of 1996. The first quarter of 1997, ended March 31, 1997, is the fifth consecutive quarter to mark a new record in bankruptcy filings.

Following a pattern set in 1996—a year that saw filings leap from 266,149 in the first quarter to 311,131 in the fourth quarter—non-business bankruptcy filings, which stand at 96 percent of total filings, continue to pace the increase. Consumer filings for calendar year 1996 eclipsed the one million mark for the first time in history. The 321,242 non-business filings in the first quarter of 1997 represents an increase of 27.1 percent over the three-month period ended March 31, 1996.

"The continued record pace of bankruptcies tracks the sustained growth in consumer spending and debt," explains Samuel J. Gerdano, Executive Director of ABI. "It suggests that 1997 will surpass the 1996 record."

Total bankruptcy filings in the United States have more than doubled during the past decade with only 530,436 petitions filed in calendar 1986. Consumer filings for calendar 1986 stood at nearly 450,000, approximately 85 percent of total filings.

Chapter 7 maintained its approximately 70 percent share of all non-business filings during the first quarter of 1997; the 226,574 chapter 7 petitions represented a 29.4 percent increase over the first quarter of 1996. Chapter 7 of the Bankruptcy Code affords an individual debtor a "fresh start," as his or her unsecured debt is discharged and the individual debtor is allowed to retain some exempt property, while the remaining assets are sold and distributed to secured creditors.

Comparing the 12-month period ended March 31, 1997 with the 12 months ended March 31, 1996, bankruptcy filings increased in each of the 94 districts of the country, except the District of the Northern Mariana Islands. The greatest increase (60.7 percent) occurred in the District of Hawaii, with the Northern District of West Virginia (59.7 percent) close behind.

The Central District of California continues to see the greatest number of filings, reporting 28,637 for the first quarter. This figure represents a 23 percent increase over filings in the first quarter of 1996.

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 5,400 attorneys, bankers, judges, professors, turnaround specialists, accountants and other bankruptcy professionals providing a forum for the exchange of ideas and information. For more information on ABI, visit ABI World at http://www.abiworld.org.

For information and statistics collected especially for the media and other researchers, visit http://www.abiworld.org/media/media.html.