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U.S. Households File for Bankruptcy at Record Levels in 2005

Contact: John Hartgen
             (703) 739-0800
            
jhartgen@abiworld.org

U.S. HOUSEHOLDS FILE FOR BANKRUPTCY AT RECORD LEVELS IN 2005

April 17, 2006, Alexandria, Va. — As consumers filed for bankruptcy in record numbers in 2005, the American Bankruptcy Institute (ABI) found that there was one personal bankruptcy for every 60 U.S. households in calendar year 2005, a record level driven largely in response to families looking to file for bankruptcy protection prior to the implementation the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). This is a 23 percent increase from calendar year 2004, which showed that nearly one out of 79 households filed for bankruptcy.

“The latest report underscores the level of financial stress for U.S. families,” said Samuel J. Gerdano, ABI Executive Director. “It also reflects the fear, if not panic, surrounding the effect of the new bankruptcy law,” he added.

The data can be viewed at http://www.abiworld.org/stats.  The table, based on data from the Administrative Office of the U.S. Courts (2005 non business bankruptcies as of December 31, 2005) and the U.S. Bureau of the Census (U.S. household unit estimates as of July 1, 2004), ranks households per filing by state and nationally. The five states with the highest bankruptcy household-per-filing rates are Indiana, Ohio, Utah, Tennessee and Oklahoma. States with the lowest rates include South Carolina, Alaska, Vermont, the District of Columbia and Hawaii. By contrast, states with the highest bankruptcy household-per-filing rates in calendar year 2004 were Utah, Tennessee, Georgia, Alabama and Indiana. The states with the lowest rates in 2004 included Vermont, Alaska, Hawaii, Maine and Massachusetts.

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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 11,000 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.