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Contact: Rali Mileva     
               
(703) 739-0800
               
rmileva@abiworld.org

Total Bankruptcy Filings Decline Slightly In 2004

March 1, 2005, Alexandria, Va. The total number of bankruptcies filed in federal courts in calendar year 2004 declined nearly 4 percent, according to data released today by the Administrative Office of the U.S. Courts. The total number of bankruptcy cases filed in this 12-month period ending December 31, 2004, totaled 1,597,462, down 3.8 percent from the 1,660,245 bankruptcy cases filed for the same period in 2003. Despite the decline, bankruptcies remain at historic highs, well above the 1.5 million record first set in 2002.

Business bankruptcies fell 2.1 percent to 34,317 in the 12-month period ending December 31, 2004, down from the 35,037 filings in the same period in 2003. So far this year, only 15 new public companies have filed for chapter 11, the lowest filing rate for new public company cases since 1997. Non-business (personal bankruptcies) fell 3.8 percent in the same 12-month period, totaling 1,563,145 in 2004, down from the 1,625,208 filings in the 12-month period ending December 31, 2003.

“This short-term decline is entirely consistent with our earlier findings of downward trends in consumer debt and credit card default rate,” said Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute. “However, credit card delinquencies and chargeoffs increased slightly in late 2004; this, together with concerns over the timing of the bankruptcy bill, may lead to a sharp rise in early 2005,” he added.

The number of bankruptcies filed during the 4th calendar quarter of 2004 (October 1-December 31, 2004) was 371,668, down 5.5 percent from the 393,348 filings in the same period in 2003.

Of the total number of bankruptcy filings for the 12-month period ending December 31, 2004, there were 1,137,958 chapter 7 filings, down 3.3 percent from the 1,176,905 chapter 7 filings in the same period in 2003. The next largest group of filings was chapter 13 filings at 449,129, down 5.1 percent from the 473,137 filings in calendar year 2003. Chapter 11 filings rose 7.7 percent to 10,132, from the 9,404 filings in calendar year 2003. In the 12-month period ending December 31, 2004, chapter 12 filings dropped to 108 from the 712 filings reported in the same period in 2003.

BUSINESS FILINGS for the 3-month period ending December 31, 2004, totaled 7,778, down 6.2 percent from the 8,294 bankruptcy business cases filed in the same period in 2003. NON-BUSINESS FILINGS for the 3-month period ending December 31, 2004, decreased 5.5 percent from 385,054 in 2003 to 363,890 in 2004.

The chapter* breakdown of BUSINESS filings for the 3-month period ending December 31, 2004, is: 5,013 chapter 7s, 1,543 chapter 11s, 71 chapter 12s and 1,104 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 3-month period ending December 31, 2004, is: 254,518 chapter 7s, 253 chapter 11s and 109,116 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending December 31, 2004 (compared to the identical period in 2003):

  1. District of Northern Mariana Islands 21.1%
  2. Southern District of New York: 18.2%
  3. District of Colorado: 8.5%
  4. Southern District of West Virginia: 7.2%
  5. Western District of Pennsylvania: 6.7%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending December 31, 2004 (compared to the identical period in 2003):

  1. District of the Virgin Islands 26.9%
  2. Central District of California 19.9%
  3. District of Hawaii 18.0%
  4. District of Nevada 17.7%
  5. District of Columbia 16.4%

More information will be available on Monday at ABI’s Statistics Page.

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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 over 10,600 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. 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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