Contact: John Hartgen
BANKRUPTCY FILINGS THROUGH FIRST THREE QUARTERS OF 2007 ECLIPSE LAST YEAR’S TOTALS
November 19, 2007,
“Bankruptcies are up
sharply from a year ago this period, reflecting a growing vulnerability
in household economics,” said
Filings by individuals or households with consumer debt increased 40.15 percent to 603,139 for the nine-month period ending Sept. 30, 2007, from 430,364 filings during the same period in 2006. The overall percentage of consumers filing for chapter 13 protection fell slightly from 41.41 percent during the first three quarters of 2006 (Jan. 1-Sept. 30) to 38.87 percent over the same period in 2007. Conversely, the percentage of chapter 7 consumer filers increased to 61.06 percent during the first nine months of 2007 from the 58.50 percent recorded during the same period of 2006.
Business filings for the nine-month period ending Sept. 30, 2007, totaled 20,260, representing a 40.45 percent increase over the similar nine-month 2006 total of 14,425. Chapter 7 business liquidations totaled 13,290 in the first three quarters of 2007, a 57.60 percent increase over the 8,433 business chapter 7 filings during the same period in 2006. Chapter 11 business reorganizations also rose from 3,644 in the first three quarters of 2006 to 4,130 in the same period of 2007, a 13.34 percent increase.
The 801,269 total filings for
the 12-month period ending Sept. 30 were down 28 percent from the same
period in 2006, which totaled 1,112,542 filings, a figure that includes
a surge in cases filed before the implementation date of a major change
in the law in 2005. The bankruptcy filing rate per thousand
Nonbusiness filings for the 12-month period ending Sept. 30, 2007, totaled 775,344, down 28.55 percent from the 1,085,209 total nonbusiness filings experienced over the same period in 2006. Business filings for the 12-month period ending Sept. 30, 2007, totaled 25,925, down 5.15 percent from the 27,333 bankruptcy petitions filed in the 12-month period ending Sept. 30, 2006.
The 484,162 total chapter 7 filings for the 12-month period ending Sept. 30, 2007, represent a 41.89 percent decrease from the 833,147 filings from the same period in 2006. Chapter 11 filings also declined, falling 1.92 percent to 5,888 in 2007 from 6,003 in 2006. Chapter 12 filings decreased as well, falling 4 percent from 376 in 2006 to 361 in 2007. However, total chapter 13 filings increased 13.87 percent to 310,802 in the 12-month period ending Sept. 30, 2007, from 272,937 in the same period last year.
BUSINESS FILINGS for the 3-month period ending Sept. 30, 2007, totaled 7,167, up 35.64 percent from the 5,284 bankruptcy business cases filed in the same period in 2006. NON-BUSINESS FILINGS for the 3-month period ending Sept. 30, 2007, increased 27.66 percent from 165,862 in 2006 to 211,742 in 2007.
The chapter* breakdown of BUSINESS filings for the 3-month period ending Sept. 30, 2007, is: 4,816 chapter 7s, 1,410 chapter 11s, 71 chapter 12s and 844 chapter 13s.
The chapter breakdown of NON-BUSINESS filings for the 3-month period ending Sept. 30, 2007, is: 127,192 chapter 7s, 173 chapter 11s and 84,376 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
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.