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FOR IMMEDIATE RELEASE                               

 

Contact: Rali Mileva          

(703) 739-0800

rmileva@abiworld.org

 

 

BANKRUPTCY FILINGS SET NEW CALENDAR YEAR RECORD IN 2003

February 25, 2004, Alexandria, Va. --Bankruptcy filings in the federal courts broke a record during calendar year 2003, according to data released today by the Administrative Office of the U.S. Courts. Total bankruptcies filed in the 12-month period ending December 31, 2003, totaled 1,660,245, up 5.2 percent from the previous record of 1,577,651 bankruptcies filed in the 12-month period ending December 31, 2002. The calendar year total for 2003, however, did not break the historic high for a 12-month period, which was reported for the 12-month period ending September 30, 2003 at 1,661,996. The overwhelming percentage of bankruptcy filings are non-business (personal) filings, totaling 1,625,208 in calendar year 2003, up 5.6 percent from the 1,539,111 personal bankruptcies filed in calendar year 2002. The number of business filings continued to decline, totaling 35,037 in 2003, down 9.1 percent from the 38,540 business bankruptcies filed in the 12-month period ending December 31, 2002. Large public company cases filed under chapter 11 fell to 142 in 2003, down from 191 in 2002.

"Today's announcement underscores the continued hangover effect of high levels of consumer spending and debt acquired over the last decade, adding to the stress households confront when they face a financial emergency such as a job loss, family breakup or uninsured medical expense," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute. "Too many American households are simply living paycheck to paycheck, making them candidates for tomorrow's bankruptcy statistics," he said.

The number of bankruptcies filed during the first quarter of fiscal year 2004 (October 1-December 31, 2003) was 393,348. That is down 0.5 percent from the 395,129 filings for the first quarter of fiscal year 2003 (October 1-December 31, 2002). This is the first time since 2000 that filings fell during any quarter.

Of the total number of bankruptcy filings for the 12-month period ending December 31, 2003, chapter 7 filings were up 6.0 percent from 1,109,923 in the same period in 2002 to 1,176,905. The next largest group of filings was chapter 13 filings at 473,137, up 3.8 percent from the 455,877 filings in calendar year 2002. Chapter 11 filings fell 16.6 percent to 9,404, from the 11,270 filings in calendar year 2002. In 2003, chapter 12 filings rose 46.8 percent to 712, from 485 in 2002. A similar surge in filings was reported for fiscal year 2003 and mostly likely can be traced to the retroactive extension of provisions for filing under this chapter, which applies only to family farmers.

BUSINESS FILINGS for the 3-month period ending December 31, 2003, totaled 8,294, down 12.7 percent from the 9,500 bankruptcy business cases filed in the same period in 2002. NON-BUSINESS FILINGS for the 3-month period ending December 31, 2003 decreased 0.1 percent from 385,629 in 2002 to 385,054 in 2003.

The chapter* breakdown of BUSINESS filings for the 3-month period ending December 31, 2003, is: 5,066 chapter 7s, 1,806 chapter 11s, 195 chapter 12s and 1,209 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 3-month period ending December 31, 2003, is: 270,519 chapter 7s, 226 chapter 11s and 114,308 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending December 31, 2003 (compared to the identical period in 2002):

1. Southern District of Texas 22.2%
2. District of Colorado 21.5%
3. Northern District of Ohio 15.4%
4. Northern District of Oklahoma 15.4%
5. Eastern District of Michigan 14.5%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending December 31, 2003 (compared to the identical period in 2002):

1. District of Northern Mariana Islands 24%
2. District of Hawaii 15.4%
3. District of Virgin Islands 13.3%
4. Middle District of Alabama 10.3%
5. Central District of California 10%

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 10,000 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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