Consumer Bankruptcy Filings Reach Highest Monthly Total Since October 2005
Contact: John Hartgen
CONSUMER BANKRUPTCY FILINGS REACH HIGHEST MONTHLY TOTAL SINCE 2005 BANKRUPTCY LAW OVERHAUL
August 4, 2009, Alexandria,
Va.— U.S. consumer bankruptcy filings reached 126,434 in July, the
highest monthly total since the Bankruptcy Abuse Prevention and Consumer
Protection Act was implemented in October 2005, according to the
American Bankruptcy Institute (ABI), relying on data from the National
Bankruptcy Research Center (NBKRC). The July 2009 consumer filing total
represented a 34.3 percent increase nationwide from the same period a
year ago, and an 8.7 percent increase over the June 2009 consumer filing
total of 116,365. Chapter 13 filings constituted 28.3 percent of all consumer
cases in July, slightly above the June rate.
'Today's bankruptcy filing number reflects the sustained and growing financial stress on U.S. households,' said ABI Executive Director Samuel J. Gerdano. 'Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year.'
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 12,000 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 www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.
NBKRC is an online research center that offers subscribers access to up-to-date research and statistics on bankruptcy filings. The database contains complete information dating back to 1995. For more information on NBKRC, please visit http://www.nbkrc.com.
*Definitions from Bankruptcy
Overview: Issues, Law and Policy, by the American
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.