Total Bankruptcy Filings Increase Nearly 38 Percent in 2007
Contact: John Hartgen
TOTAL BANKRUPTCY FILINGS INCREASE NEARLY 38 PERCENT IN 2007
April 15, 2008
“The latest figures
ratify trends that began last year, depicting households under growing
stress from heavy consumer debts, now in homes they can’t afford
and can’t sell,” said
Business bankruptcies recorded the sharpest percentage increase as the 28,322 business filings during calendar year 2007 represented a 43.8 percent increase in filings from the record low of 19,695 filings made during the 12-month period ending Dec. 31, 2006. While the 12-month business filing total for 2007 was still lower than any year prior to 2006, the 2007 total was trending towards the 35,293 business filings averaged annually for the past decade (1998-2007).
Consumer filings rebounded to 822,590 during the 2007 calendar year, representing a 37.6 percent increase over the 597,965 recorded during the same period in 2006. The 500,613 consumer chapter 7 filings during the 12-month period ending Dec. 31, 2007, comprised 60.9 percent of the total consumer filings for the 2007 calendar year. The chapter 7 total for 2007 represented a 43.4 percent increase over the 349,012 consumer chapter 7 filings during 2006.
The 321,359 consumers who filed for chapter 13 during the 12-month period ending Dec. 31, 2007, comprised 39.1 percent of the overall consumer filing total. The chapter 13 total for 2007 represents a 29.4 percent increase over the 248,430 consumer chapter 13 filings during 2006.
The 226,413 total bankruptcies recorded during the fourth calendar quarter of 2007 (Oct.1-Dec. 31) represent a 27.5 percent increase from the 177,599 filings during the same period in 2006. The 2007 fourth calendar quarter filing total was the highest of any previous quarter for 2007 and represented a 3.4 percent increase over the third quarter (July 1 – Sept. 30) total of 218,909.
The 218,428 consumer filings in the fourth quarter of 2007 represent a 27 percent increase in comparison to the 172,013 consumer filings for the same quarter of 2006. The consumer filing total for the fourth calendar quarter also represented a 3.2 percent increase from the previous total of 211,742 filings from the third quarter of 2006.
Business filings, which totaled 7,985 for the fourth calendar quarter of 2007, represented a 43 percent increase from the 5,586 filed in the same 3-month period in 2006 (Oct. 1-Dec. 31). Business filings also rose over the previous quarter as the fourth calendar quarter represented a 11.4 percent increase over 7,167 business filings reported during the third quarter of 2007 (July 1- Sept. 30).
The chapter* breakdown of BUSINESS filings for the 3-month period ending Dec.31, 2007, is 5,420 chapter 7s, 1,612 chapter 11s, 77 chapter 12s and 869 chapter 13s.
The chapter breakdown of NONBUSINESS filings for the 3-month period ending Dec. 31, 2007, is 132,192 chapter 7s, 181 chapter 11s and 86,055 chapter 13s.
States with the HIGHEST PER CAPITA FILING RATE (Total Filings) for the 12-month period ending Dec. 31, 2007:
Districts with the HIGHEST PERCENTAGE INCREASE in Total Filings for the 12-month period ending Dec. 31, 2007 (compared to the identical period in 2006):
1. District of Nevada: 98.5%
2. Eastern District of California: 93.6%
4. Southern District of California: 82.9%
5. District of Maine: 74.2%
Districts with the LOWEST PERCENTAGE INCREASE in Total Filings for the 12-month period ending Dec. 31, 2007 (compared to the identical period in 2006):
District of the
District of the
3. District of Montana: 1.8%
Western District of
Middle District of
*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.