Bankruptcy Filings in First Half of 2007 Up 48 Percent from a Year Ago
BANKRUPTCY FILINGS IN FIRST HALF OF 2007 UP 48 PERCENT FROM A YEAR AGO
“The new upward
trend in bankruptcies reflects the economic reality of households under
increasing financial stress,” said
Filings by individuals or households with consumer debt increased 48.34 percent to 391,105 for the six-month period ending June 30, 2007, from the 2006 first-half total of 263,660. The overall percentage of consumers filing for chapter 13 protection fell slightly from 41.15 percent during the first half of 2006 (January 1-June 30) to 38.35 percent over the same period in 2007. Conversely, the first-half 2007 percentage of chapter 7 consumer filers increased to 61.58 percent from the 58.76 percent recorded in the first half of 2006.
Business filings for the six-month period ending June 30, 2007, totaled 12,985, representing a 45.18 percent increase over the first-half 2006 total of 8,944. Chapter 7 liquidations increased to 8,404 in the first half of 2007, a 65.21 percent increase over the 5,087 business chapter 7 filings during the same period in 2006. Chapter 11 reorganizations also rose from 2,370 in the first half of 2006 to 2,713 in the same period of 2007, a 14.47 percent increase.
The 751,056 total filings
for the 12-month period ending June 30 were down 49.41 percent from the
same period in 2006, which totaled 1,484,570 filings, a figure that
includes a surge in cases filed before the implementation date of a
major change in the law. The bankruptcy filing rate per thousand
Nonbusiness filings for the 12-month period ending June 30, 2007, totaled 727,167, down 50 percent from the 1,453,008 total nonbusiness filings experienced over the same period in 2006. Business filings for the 12-month period ending June 30, 2007, totaled 23,889, down 24.31 percent from the 31,562 bankruptcy petitions filed in the 12-month period ending June 30, 2006.
The 450,332 total chapter 7 filings for the 12-month period ending June 30, 2007, represent a 61.34 percent decrease from the 1,164,815 filings from the same period in 2006. Chapter 13 filings fell 5.87 percent to 294,693 in the 12-month period ending June 30, 2007, from 313,085 in the same period last year. Chapter 11 filings also declined, falling 10.25 percent to 5,586 in 2007 from 6,224 in 2006. However, chapter 12 filings rose 7.22 percent from 360 in 2006 to 386 in 2007.
BUSINESS FILINGS for the 3-month period ending June 30, 2007, totaled 6,705, up 38.02 percent from the 4,858 bankruptcy business cases filed in the same period in 2006. NON-BUSINESS FILINGS for the 3-month period ending June 30, 2007, increased 34.95 percent from 150,975 in 2006 to 203,744 in 2007.
The chapter* breakdown of BUSINESS filings for the 3-month period ending June 30, 2007, is: 4,333 chapter 7s, 1,430 chapter 11s, 112 chapter 12s and 821 chapter 13s.
The chapter breakdown of NON-BUSINESS filings for the 3-month period ending June 30, 2007, is: 127,180 chapter 7s, 144 chapter 11s and 76,420 chapter 13s.
ABI is the largest multi-disciplinary, nonpartisan 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 11,500 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 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.