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September Consumer Bankruptcy Filings Increase 23 Percent over Previous Year

Contact: John Hartgen
             (703) 739-0800
             
[email protected]

SEPTEMBER CONSUMER BANKRUPTCY FILINGS INCREASE 23 PERCENT OVER PREVIOUS YEAR

October 2, 2007, Alexandria, Va. U.S. consumer bankruptcy filings increased nearly 23 percent nationwide in September from the previous year, according to the American Bankruptcy Institute (ABI). Yet according to data from the National Bankruptcy Research Center (NBKRC), the overall September consumer filing total of 68,926 represented a 7.6 percent decrease from the 74,607 filings in August. Chapter 13 filings constituted 40 percent of all consumer cases in September, a slight increase over the previous six months. 

“Bankruptcy filings are elevated from a year ago and likely to uptick further through the end of the year,” said ABI Executive Director Samuel J. Gerdano.  “Continued pressure on housing markets, combined with high consumer debt burdens, will lead more households to consider bankruptcy as an option to their financial problems.”

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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 11,500 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.

 

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 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.

 

February Consumer Bankruptcy Filings Increase 11 Percent from Previous Month

Contact: John Hartgen
             703-894-5935
             [email protected]

 

FEBRUARY CONSUMER BANKRUPTCY FILINGS INCREASE 11 PERCENT FROM PREVIOUS MONTH


 
March 1, 2011, Alexandria, Va.— February consumer bankruptcies increased 11 percent nationwide from January 2011, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The data showed that the overall consumer filing total for February reached 102,686, up from the 92,669 consumer filings recorded in January 2011.
 
“Though consumers are striving to reduce their debt burden, high unemployment and a still-poor housing sector continue to fuel new bankruptcies,” said ABI Executive Director Samuel J. Gerdano. “We expect these factors to lead to over 1.5 million consumer filings this year.'
 
Though an increase from the January 2011 filings, the February 2011 consumer bankruptcy total represents an 8 percent decrease from the 111,693 filings recorded in February 2010. Chapter 13 filings constituted 30 percent of all consumer cases in February, a slight decrease from January.


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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 12,800 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 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 

July Consumer Bankruptcy Filings Fall 18 Percent from Last Year

Contact: John Hartgen
             703-894-5935
             [email protected]

JULY CONSUMER BANKRUPTCY FILINGS FALL 18 PERCENT FROM LAST YEAR

August 2, 2011, Alexandria, Va. - July consumer bankruptcies decreased 18 percent nationwide from July 2010, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The data showed that the overall consumer filing total for July reached 113,470, down from the 137,698 consumer filings recorded in July 2010. It was the seventh straight month of fewer bankruptcies in 2011 than last year.

'The continued decline in consumer bankruptcies in tandem with a sluggish economy is a reflection of the deleveraging of household debts and tightening of consumer credit over the past year,' said ABI Executive Director Samuel J. Gerdano. 'Should these trends persist, we expect to see fewer consumer bankruptcies in 2011 than were filed in 2010.'

The July 2011 filings also represented a 5 percent decrease from the June 2011 consumer bankruptcy total of 119,768 filings. The percentage of chapter 13 filings for July was 29 percent, a one percent increase from June.

###

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 13,000 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 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. 

 

Consumer Bankruptcy Filings Surge Past One Million in First Nine Months of 2009

Contact: John Hartgen
              (703) 739-0800
             
[email protected]

 

CONSUMER BANKRUPTCY FILINGS SURGE PAST ONE MILLION DURING FIRST NINE MONTHS OF 2009

October 2, 2009, Alexandria, Va.— Consumer bankruptcies totaled 1,046,449 filings through the first nine months of 2009 (Jan. 1-Sept. 30), the first time since the 2005 bankruptcy overhaul that filings have surged past the 1 million mark during the first three calendar quarters of a year, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The filings for the first three-quarters of 2009 were the highest total since the 1,350,360 consumer filings through the first nine months of 2005.

'Bankruptcy filings continue to climb as consumers look to shelter themselves from the effects of rising unemployment rates and housing debt,' said ABI Executive Director Samuel J. Gerdano. 'The consumer filing total through the first nine months is consistent with our expectation that consumer bankruptcies will top 1.4 million in 2009.'

The September 2009 consumer filing total reached 124,790, a 41 percent increase from the 88,663 consumer filings in September 2008. The September 2009 filings also represented a 4 percent increase over the 119,874 filings in August 2009 and it is the fourth highest single month since the 2005 law change. Chapter 13 filings constituted 28 percent of all consumer cases in September, unchanged from the August rate.

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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 12,300 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.

 

Bankruptcy Filings During First Three Quarters of 2006 Drop Off Nearly One Million from Previous Year

Contact: John Hartgen
             (703) 739-0800
            
[email protected]

BANKRUPTCY FILINGS DURING FIRST THREE QUARTERS OF 2006 DROP OFF NEARLY ONE MILLION FROM PREVIOUS YEAR

December 5, 2006, Alexandria, Va.— The total number of U.S. bankruptcies filed during the first three quarters of 2006 (Jan. 1 – Sept. 30, 2006) fell to 443,750 from 1,410,484 for the same period in 2005, according to data released today by the Administrative Office of the U.S. Courts. The combined total of the first three quarters of 2006 (Jan. 1- Sept. 30) represent the lowest number of calendar filings for the first nine months of a year since the first three quarters of 1987, when bankruptcy filings totaled 432,821 during a similar calendar period. The filings for the first three calendar quarters of 2006 also represent a 68.54 percent drop in filings from the previous year’s three quarter filings (Jan. 1-Sept. 30, 2005), when 1,410,484 bankruptcies were filed.

“On the eve of a Senate oversight hearing on the new bankruptcy law, today’s numbers confirm that we are seeing filing levels not present since the 1980’s,” said Samuel J. Gerdano, ABI Executive Director. “Congress clearly wanted to reduce filings, but only time will tell if the 2006 trend is sustainable,” he concluded.

The 2006 third quarter (July 1-Sept. 30, 2006) filing total of 171,146 also represents a 68.42 percent drop compared with the 542,002 total filings for the same three-month period ending Sept. 30, 2005. The 1,112,542 total filings during the 12-month period ending Sept. 30, 2006, represent the lowest number of filings in a 12-month period since the 12-month period ending Sept. 30, 1996, when there were 1,111,964 filings. Total filings decreased from the 1,782,643 filings reported for the 12-month period ending June 30, 2005.

Total consumer filings for the nine-month period from Jan. 1 – Sept. 30, 2006, were 429,522, representing a 68.97 percent decrease from the same period in 2005, in which consumer filings totaled 1,384,209. The 14,228 business filings from Jan. 1 – Sept. 30, 2006, represented a 45.85 percent decrease from the same period the previous year, in which 26,275 business filings were recorded.

Due in large part to the new requirements of the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 (BAPCPA), the type of consumer bankruptcies filed in the first nine months of 2006 shifted considerably from the first nine months of 2005. Chapter 13 filings represented 41.39 percent of all consumer filings in the nine-month period ending Sept. 30, up from 22.79 percent during the same period of 2005. Conversely, the percentage of consumer chapter 7 filings fell to 58.52 percent of total consumer filings in the nine-month period ending Sept. 30, 2006, from 77.16   percent during the first three calendar quarters of 2005.

Nonbusiness filings for the 12-month period ending Sept. 30, 2006, fell 37.9 percent to 1,085,209 from the 1,748,421 total nonbusiness filings in the 12-month period ending Sept. 30, 2005. The 27,333 total business filings for the 12-month period ending Sept. 30, 2006, represented a 20.13 percent decrease from the 34,222 bankruptcy petitions filed in the 12-month period ending Sept. 30, 2005.

Total chapter 7 filings fell 38.11 percent to 833,147 in the 12-month period ending Sept. 30, 2006, from 1,346,201 in the same period last year. Chapter 13 filings fell 36.43 percent to 272,937 in the 12-month period ending Sept. 30, 2006, from 429,316 in the same period last year. Chapter 11 filings also declined, falling 9.55 percent to 6,003 in the 12-month period ending Sept. 30, 2006, from 6,637 in 2005. Conversely, chapter 12 filings rose slightly from 364 in the 12-month period ending Oct. 31, 2005, to 376 in 2006.

BUSINESS FILINGS for the three-month period ending Sept. 30, 2006, totaled 5,284, down 44.24 percent from the 9,476 bankruptcy business cases filed in the same quarter in 2005. NONBUSINESS FILINGS for the three-month period ending Sept. 30, 2006, decreased 68.85 percent from 532,526 in the same period in 2005 to 165,862.

The chapter* breakdown of BUSINESS filings for the three-month period ending Sept. 30, 2006, is: 3,249 chapter 7s, 1,192 chapter 11s, 97 chapter 12s and 716 chapter 13s.

The chapter breakdown of NONBUSINESS filings for the three-month period ending Sept. 30, 2006, is: 96,442 chapter 7s, 140 chapter 11s and 69,280 chapter 13s.

NOTE: ALL CIRCUIT DISTRICTS EXPERIENCED FILING DECREASES FOR THE 12 MONTH PERIOD ENDING SEPT. 30, 2006 WHEN COMPARED TO THE IDENTICAL PERIOD IN 2005.

Districts with the LOWEST PERCENTAGE DECREASE in Total Filings for the 12-month period ending Sept. 30, 2006 (compared to the identical period in 2005):

  1. District of the Virgin Islands: 8.51%
  2. District of Vermont: 23.10%
  3. Northern District of Indiana: 26.32%   
  4. Eastern District of Michigan: 28.07%
  5. Western District of Pennsylvania: 29.64%

Districts with the HIGHEST PERCENTAGE DECREASE in Total Filings for the 12-month period ending Sept. 30, 2006 (compared to the identical period in 2005):

  1. Eastern District of Louisiana: 51.78%
  2. District of Utah: 51.41%
  3. District of Arizona: 50.92%      
  4. District of New Mexico: 49.10%       
  5. Northern District of West Virginia: 45.76%

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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 11,500 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.

 

Total Bankruptcies Eclipse the 2 Million Mark in 2005 as Consumers File in Record Numbers Prior to Implementation of New Bankruptcy Law

Contact: John Hartgen

              Phone: 703-739-0800

              Email: [email protected]

 

Total Bankruptcies Eclipse the 2 Million Mark in 2005 as Consumers File in Record Numbers Prior to Implementation of New Bankruptcy Law

March 24, 2006 Alexandria, Va. — Bankruptcy filings eclipsed the two million mark for the first time in the United States as 2,078,415 filings were reported in calendar year 2005, according to data from the Administrative Office of the U.S. Courts. The total in this 12-month period ending December 31, 2005, represents a record 30 percent increase compared with the 1,597,462 total filings for the same period in 2004.

Driven largely in response to the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), consumers provided 98 percent of the overall total filings, the highest concentration of consumer filings on record, as nonbusiness filings during the 12-month period ending December 31, 2005, increased to a record 2,039,214, which was a 31 percent increase from the total of 1,563,145 of the same period in 2004. Business filings also increased to 39,201 for the 12-month period ending December 31, 2005, representing a 14 percent increase from the total of 34,317 from same period in 2004. This is the highest total of business bankruptcies in a calendar year since 2001’s total of 40,099.

“It is ironic that, at least in the short term, a law Congress hoped would reduce bankruptcies instead caused the largest upward spike in history,” said Samuel J. Gerdano, ABI Executive Director.  “Bankruptcies have in fact fallen dramatically so far in 2006 under the new, more-restrictive law,” he added.

The record high of 667,431 bankruptcies recorded during the 4th calendar quarter of 2005 (October 1-December 31, 2005), is representative of the many debtors who rushed to file prior to the Oct. 17 implementation date of BAPCPA. October 2005 filings alone totaled 630,497, representing 95 percent of the filings for the three-month period and 30 percent of the 12-month period ending December 31, 2005. Nonbusiness filings in October 2005 reached 619,588, which represented 30 percent of the nonbusiness filings for the 12- month period ending December 31, 2005, and 95 percent of the 654,633 total nonbusiness filings for the 4th quarter of 2005. The 10,909 October business filings were representative of 28 percent of the 12-month period ending December 31, 2005 business filings and 85 percent of the 12,798 business filings for the 4th quarter 2005.

Largely as a result of the BAPCPA, dramatic decreases in filings were seen during the months of November and December 2005 as the combined filings of 36,934 for those two months represented just 1.78 percent of the total 12-month period ending December 31, and 6 percent for the 4th quarter 2005. November’s total filings dropped to 14,324, which represented less than one percent (0.69%) of the total for the 12-month period ending December 2005 and 2 percent of the 4th quarter total. The total of 13,643 nonbusiness filings in November was representative of less than one percent of the total nonconsumer filings (0.67%) for the 12-month period ending December 31, 2005 and just 2 percent of the 4th calendar quarter nonbusiness filings. Business filings experienced a similar decline as the 681 filings in November represented less than 2 percent (1.74%) for CY2005 and 5 percent of the 2005 4th quarter’s total of 12,798. By comparison, 2004 totals for the month of November were 122,796 total filings, 2,643 business filings and 120,153 nonbusiness filings, each representative of nearly 8 percent of the 12-month total for their respective categories.

Total filings increased in December 2005 to 22,610, which represented a 63 percent increase over November total filings, but just over 1 percent of the 12-month period ending December 31, 2005 total (1.09%) and just over 3 percent (3.39%).for the 4th quarter 2005. December nonbusiness filings reached 21,402, representing just over one percent (1.05%) of the total nonbusiness filings for the 12-month period ending December 31, 2005, and only 3 percent of the 4th quarter 2005 nonbusiness filings. December business filings increased as well to 1,208, but only comprised 3 percent of the total business filings for the 12-month period and represented just over 9 percent of the 4th quarter total business filings. By comparison, 2004 totals for the month of December were 118,193 total filings, 2,493 business filings and 115,700 nonbusiness filings. Each was representative of just over seven percent of the 12-month total for their respective categories.

However, the 667,431 filings in the 4th quarter of 2005 (October 1-December 31, 2005) represent an 80 percent increase in comparison to the 371,668 filings for the same quarter of 2004 (October 1-December 31, 2004) and a 23 percent increase from the previous record total 542,002 from the 3rd quarter of 2005 (July 1- September 30, 2005).

Of the total number of bankruptcy filings in the 12-month period ending December 31, 2005, there were 1,659,017 chapter 7 filings, a 46 percent increase over the 1,137,958 chapter 7 filings for the same period in 2004. Chapter 7 filings also increased 33 percent from the 2005 third quarter from 429,299 to 570,355 in the 2005 fourth quarter.

The next-largest group of filings in the 12-month period ending December 31, 2005, was chapter 13 at 412,130, a 9 percent decrease from the 449,129 filings in the 12-month period ending December 31, 2004. CY2005 chapter 12 filings totaled 380, a 252 percent increase from the 108 filings in the 12-month period ending December 31, 2004. Reflecting the strong economy and low interest rates, chapter 11 filings fell from 10,132 in CY2004 to 6,800 in the 12-month period ending December 31, 2005, a 33 percent decrease.

BUSINESS FILINGS for the 3-month period ending December 31, 2005, totaled 12,798, a 64.54 percent increase from the 7,778 bankruptcy business cases filed in the same period in 2004. NONBUSINESS FILINGS for the 3-month period ending September 30, 2005, totaled 654,633, an 80 percent increase from the 363,890 total in the same quarter in 2004.

The chapter* breakdown of BUSINESS filings for the 3-month period ending December 31, 2005, is: 9,701 chapter 7s, 1,692 chapter 11s, 87 chapter 12s and 1,308 chapter 13s.

The chapter breakdown of NONBUSINESS filings for the 3-month period ending December 31, 2005, is 560,654 chapter 7s, 263 chapter 11s and 93,714 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending December 31, 2005 (compared to the identical period in 2004):

  1. District of Virgin Islands: 68.42%
  2. Northern District of Ohio: 57.47%
  3. Southern District of West Virginia: 57.02%
  4. District of North Dakota: 54.68%
  5. District of Vermont: 54.42%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending December 31, 2005 (compared to the identical period in 2004):

  1. Southern District of Georgia: 9.79%
  2. Middle District of Georgia: 6.67%
  3. District of Puerto Rico: 0.82%
  4. District of South Carolina: 0.47% (Increase)
  5. Middle District of Tennessee: 4.19% (Increase)

More information will be available at  ABI’s Statistics Page,http://www.abiworld.org/statistics.

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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.

*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.

 

First Quarter Bankruptcy Filings Fall to Lowest Levels Since 1985

Contact: John Hartgen
             (703) 739-0800
             [email protected]

FIRST QUARTER BANKRUPTCY FILINGS FALL TO LOWEST LEVELS SINCE 1985

May 26, 2006, Alexandria, Va. The total number of U.S. bankruptcies filed during the first three months of 2006 were the lowest on record in more than 20 years as filings fell to 116,771, according to data released today by the Administrative Office of the U.S. Courts. The total filings for the first calendar year quarter of 2006 (January 1-March 31, 2006) have not been experienced since the 1985 fourth calendar year quarter (October 1-December 31, 1985), when bankruptcy filings totaled 114,021. The 2006 first quarter calendar year filings also represent a 82.5 percent drop in filings from the previous quarter (October 1-December 31, 2005) when 667,431 new cases were filed. It is also represents a 70.89 percent drop compared to the 401,149 total filings for the same three-month period ending March 31, 2005.

A new bankruptcy law went into effect on October 17, 2005. The new law requires that consumers first go through credit counseling before being eligible for bankruptcy. The new law also reduces the scope of bankruptcy relief.

“Congress hoped the new law would reduce the number of new consumer bankruptcies and the latest figures reflect that intention, though there are still many families under financial stress,” said Samuel J. Gerdano, ABI Executive Director. “We haven’t seen numbers this low since the mid-1980’s, when a gallon of gasoline was $1.20.”

Consumer filings represented the largest drop-off as they decreased 82.79 percent to 112, 685 for the three-month period ending March 31, 2006 from 654,633 the previous three-month period ending December 31, 2005. They also represent a 71.33 percent decrease from the same period in 2005, which had a total of 393,086 nonbusiness filings.

Business filings for the three-month period ending March 31, 2006 also experienced significant decreases as the total of 4,086 filings were down 68.02 percent from the 2005 fourth quarter total of 12,798 and 49.32 percent from the 8,063 business cases filed in the same quarterly period of 2005.

However, total filings increased for each month of the three-month period ending March 31, 2006, as nearly half of the total filings (44.26 percent) occurred in the month of March with 51,683 filings. January 2006 totaled 28,368 filings, while 36,720 total filings were recorded for February 2006. The steady increase was in stark contrast to the previous quarter’s steep monthly drop due to the October 17, 2005, implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Filings fell from a high of 630,468 in October 2005 to 14,480 for November 2005 and 22,927 for December 2005.

The total filings for the 12-month period ending March 31, 2006 were sustained by the surge of debtors filing for bankruptcy before the October 2005 implementation of BAPCPA. Total filings rose 12.81 percent to 1,794,795 compared to 1,590,975 bankruptcy cases filed in the 12-month period ending March 2005. Prior to the March 2006 12-month reporting period, bankruptcy filings rose 30 percent in the 12-month period ending December 31, 2005, which was also attributable to the rush prior to BAPCPA’s implementation.

Nonbusiness filings for the 12-month period ending March 31, 2006, totaled 1,759,503, up 12.86 percent from the 1,559,023 total nonbusiness filings in the 12-month period ending March 31, 2005. Business filings for the 12-month period ending March 31, 2006, totaled 35,292, up 10.45 percent from the 31,952 bankruptcy petitions filed in the 12-month period ending March 31, 2005.

Chapter 7 filings rose to 1,432,074 for the 12-month period ending March 31, 2006, representing a 25.43 percent increase from the 1,141,715 filings from the same period in 2005. Chapter 13 filings fell 19.48 percent, to 355,756 in the 12-month period ending March 31, 2006 from 441,838 in the same period last year. Chapter 11 filings also declined, falling 8.69 percent to 6,497 in 2006 from 7,115 in 2005. Chapter 12 filings rose 93.65 percent from 189 in 2005 to 366 in 2006.

BUSINESS FILINGS for the 3-month period ending March 31, 2006, totaled 4,086, down 49.32 percent from the 8,063 bankruptcy business cases filed in the same period in 2005. NON-BUSINESS FILINGS for the 3-month period ending March 31, 2006, decreased 71.33 percent from 393,086 in 2005 to 112,685 in 2006.

The chapter* breakdown of BUSINESS filings for the 3-month period ending March 31, 2006, is: 2,147 chapter 7s, 1,291 chapter 11s, 84 chapter 12s and 540 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 3-month period ending March 31, 2006, is: 63,250 chapter 7s, 121 chapter 11s and 49,314 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending March 31, 2006 (compared to the identical period in 2005):

  1. District of Vermont: 39.76%
  2. Northern District of Indiana: 35.86%
  3. District of Alaska: 35.10%       
  4. Northern District of Ohio: 33.76
  5. Western District of Oklahoma: 33.37%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending March 31, 2006 (compared to the identical period in 2005):

  1. Southern District of Georgia: 19.32%
  2. Middle District of Georgia: 17.14%
  3. Southern District of Alabama: 15.02% 
  4. District of South Carolina: 14.93%       
  5. District of Utah: 12.05%

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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 11,500 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.

 

Bankruptcy Filings During First Half of 2006 Fall to Lowest Levels Since 1986

Contact: John Hartgen
             (703) 739-0800
            
[email protected]

 

BANKRUPTCY FILINGS DURING FIRST HALF OF 2006 FALL TO LOWEST LEVELS SINCE 1986

August 28, 2006, Alexandria, Va. The total number of U.S. bankruptcies filed during the first six months of 2006 were the lowest first-half calendar year filings on record in 20 years, as filings for the period from Jan. 1 – June 30, 2006 fell to 272,604 from 868,482, the total number of filings for the same period in 2005, according to data released today by the Administrative Office of the U.S. Courts. When combined, the 2006 second-quarter  (April 1 – June 30) bankruptcy filings total of 155,833 and the first-quarter (Jan. 1 – March 31, 2006) filings total of 116, 771 represent the lowest number of calendar filings for the first six months of a year since the first half of 1986, when bankruptcy filings totaled 258,311. The 2006 first-half filings also represent a 68.61 percent drop in filings from the previous year’s first-half filings (Jan. 1-June 30, 2005), when 868,482 bankruptcies were filed. The 2006 second-quarter filings also represent a 66.65 percent drop compared with the 467,333 total filings for the same three-month period ending June 30, 2005.

Total consumer filings for the six-month period from Jan. 1 – June 30, 2006 were 263,660, representing a 69.04 percent decrease from the same period in 2005, in which consumer filings totaled 851,683. The 8,944 business filings from Jan. 1 – June 30, 2006, represented a 46.76 percent decrease from the same period the previous year, in which 16,799 business filings were recorded.

Due in large part to the new requirements of the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 (BAPCPA), the type of consumer bankruptcies filed in the first half of 2006 shifted considerably from the first half of 2005. Chapter 13 filings represented 41.15 percent of all consumer filings in the six-month period ending June 30, 2006, up from 24.15 percent during the same period of 2005. Conversely, the percentage of consumer chapter 7 filings fell to 58.76 percent of total consumer filings in the six-month period ending June 30, 2006, from 75.81 percent in the first calendar half of 2005.

The 1,484,570 total filings during the 12-month period ending June 30, 2006, represent the lowest number of filings in a 12-month period since the 12-month period ending Sept. 30, 2001, when there were 1,437,354 filings. Total filings decreased from the 1,794,795 filings reported for the 12-month period ending March 31, 2006.

Nonbusiness filings for the 12-month period ending June 30, 2006, fell 9.46 percent to 1,453,008 from the 1,604,848 total nonbusiness filings in the 12-month period ending June 30, 2005. The 31,562 total business filings for the 12-month period ending June 30, 2006 represented a 2.6 percent decrease from the 32,406 bankruptcy petitions filed in the 12-month period ending June 30, 2005.

Chapter 13 filings fell 29.48 percent to 313,085 in the 12-month period ending June 30, 2006, from 443,945 in the same period last year. Chapter 11 filings also declined, falling 7.15 percent to 6,224 in the 12-month period ending June 30, 2006, from 6,703 in 2005. Conversely, chapter 12 filings rose 24.14 percent from 290 in the 12-month period ending June 30, 2005, to 360 in 2006.

BUSINESS FILINGS for the three-month period ending June 30, 2006, totaled 4,858, down 44.39 percent from the 8,736 bankruptcy business cases filed in the same period in 2005. NONBUSINESS FILINGS for the three-month period ending June 30, 2006, decreased 67.08 percent from 458,597 in the same period in 2005 to 150,975.

The chapter* breakdown of BUSINESS filings for the three-month period ending June 30, 2006, is: 2,940 chapter 7s, 1,079 chapter 11s, 99 chapter 12s and 729 chapter 13s.

The chapter breakdown of NONBUSINESS filings for the three-month period ending June 30, 2006, is: 91,674 chapter 7s, 131 chapter 11s and 59,170 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending June 30, 2006 (compared to the identical period in 2005):

  1. District of Vermont: 11.86%
  2. Northern District of Indiana: 10.63%
  3. District of Alaska: 8.71%         
  4. District of the Northern Mariana Islands: 7.14%
  5. District of Nevada: 5.98%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending June 30, 2006 (compared to the identical period in 2005):

  1. Eastern District of Louisiana: 33.96%
  2. District of Utah: 31.92%
  3. Southern District of Georgia: 29.88%   
  4. Southern District of Alabama: 29.67% 
  5. Middle District of Georgia: 28.79%

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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 11,500 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.

 

Bankruptcy Filings During First Three Quarters of 2006 Drop Off Nearly One Million from Previous Year

Contact: John Hartgen
             (703) 739-0800
            
[email protected]

BANKRUPTCY FILINGS DURING FIRST THREE QUARTERS OF 2006 DROP OFF NEARLY ONE MILLION FROM PREVIOUS YEAR

December 5, 2006, Alexandria, Va.— The total number of U.S. bankruptcies filed during the first three quarters of 2006 (Jan. 1 – Sept. 30, 2006) fell to 443,750 from 1,410,484 for the same period in 2005, according to data released today by the Administrative Office of the U.S. Courts. The combined total of the first three quarters of 2006 (Jan. 1- Sept. 30) represent the lowest number of calendar filings for the first nine months of a year since the first three quarters of 1987, when bankruptcy filings totaled 432,821 during a similar calendar period. The filings for the first three calendar quarters of 2006 also represent a 68.54 percent drop in filings from the previous year’s three quarter filings (Jan. 1-Sept. 30, 2005), when 1,410,484 bankruptcies were filed.

“On the eve of a Senate oversight hearing on the new bankruptcy law, today’s numbers confirm that we are seeing filing levels not present since the 1980’s,” said Samuel J. Gerdano, ABI Executive Director. “Congress clearly wanted to reduce filings, but only time will tell if the 2006 trend is sustainable,” he concluded.

The 2006 third quarter (July 1-Sept. 30, 2006) filing total of 171,146 also represents a 68.42 percent drop compared with the 542,002 total filings for the same three-month period ending Sept. 30, 2005. The 1,112,542 total filings during the 12-month period ending Sept. 30, 2006, represent the lowest number of filings in a 12-month period since the 12-month period ending Sept. 30, 1996, when there were 1,111,964 filings. Total filings decreased from the 1,782,643 filings reported for the 12-month period ending June 30, 2005.

Total consumer filings for the nine-month period from Jan. 1 – Sept. 30, 2006, were 429,522, representing a 68.97 percent decrease from the same period in 2005, in which consumer filings totaled 1,384,209. The 14,228 business filings from Jan. 1 – Sept. 30, 2006, represented a 45.85 percent decrease from the same period the previous year, in which 26,275 business filings were recorded.

Due in large part to the new requirements of the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 (BAPCPA), the type of consumer bankruptcies filed in the first nine months of 2006 shifted considerably from the first nine months of 2005. Chapter 13 filings represented 41.39 percent of all consumer filings in the nine-month period ending Sept. 30, up from 22.79 percent during the same period of 2005. Conversely, the percentage of consumer chapter 7 filings fell to 58.52 percent of total consumer filings in the nine-month period ending Sept. 30, 2006, from 77.16   percent during the first three calendar quarters of 2005.

Nonbusiness filings for the 12-month period ending Sept. 30, 2006, fell 37.9 percent to 1,085,209 from the 1,748,421 total nonbusiness filings in the 12-month period ending Sept. 30, 2005. The 27,333 total business filings for the 12-month period ending Sept. 30, 2006, represented a 20.13 percent decrease from the 34,222 bankruptcy petitions filed in the 12-month period ending Sept. 30, 2005.

Total chapter 7 filings fell 38.11 percent to 833,147 in the 12-month period ending Sept. 30, 2006, from 1,346,201 in the same period last year. Chapter 13 filings fell 36.43 percent to 272,937 in the 12-month period ending Sept. 30, 2006, from 429,316 in the same period last year. Chapter 11 filings also declined, falling 9.55 percent to 6,003 in the 12-month period ending Sept. 30, 2006, from 6,637 in 2005. Conversely, chapter 12 filings rose slightly from 364 in the 12-month period ending Oct. 31, 2005, to 376 in 2006.

BUSINESS FILINGS for the three-month period ending Sept. 30, 2006, totaled 5,284, down 44.24 percent from the 9,476 bankruptcy business cases filed in the same quarter in 2005. NONBUSINESS FILINGS for the three-month period ending Sept. 30, 2006, decreased 68.85 percent from 532,526 in the same period in 2005 to 165,862.

The chapter* breakdown of BUSINESS filings for the three-month period ending Sept. 30, 2006, is: 3,249 chapter 7s, 1,192 chapter 11s, 97 chapter 12s and 716 chapter 13s.

The chapter breakdown of NONBUSINESS filings for the three-month period ending Sept. 30, 2006, is: 96,442 chapter 7s, 140 chapter 11s and 69,280 chapter 13s.

NOTE: ALL CIRCUIT DISTRICTS EXPERIENCED FILING DECREASES FOR THE 12 MONTH PERIOD ENDING SEPT. 30, 2006 WHEN COMPARED TO THE IDENTICAL PERIOD IN 2005.

Districts with the LOWEST PERCENTAGE DECREASE in Total Filings for the 12-month period ending Sept. 30, 2006 (compared to the identical period in 2005):

  1. District of the Virgin Islands: 8.51%
  2. District of Vermont: 23.10%
  3. Northern District of Indiana: 26.32%   
  4. Eastern District of Michigan: 28.07%
  5. Western District of Pennsylvania: 29.64%

Districts with the HIGHEST PERCENTAGE DECREASE in Total Filings for the 12-month period ending Sept. 30, 2006 (compared to the identical period in 2005):

  1. Eastern District of Louisiana: 51.78%
  2. District of Utah: 51.41%
  3. District of Arizona: 50.92%      
  4. District of New Mexico: 49.10%       
  5. Northern District of West Virginia: 45.76%

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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 11,500 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.

 

2006 Bankruptcies Fall to Lowest Levels Since 1980s

Contact: John Hartgen
             (703) 739-0800
            
[email protected]

 

2006 BANKRUPTCIES FALL TO LOWEST LEVELS SINCE 1980s

April 17, 2007 Alexandria, Va. —Bankruptcy filings in the United States dropped to their lowest level since 1988 as calendar year 2006 filings plunged following the implementation of the new bankruptcy law in 2005, according to data from the Administrative Office of the U.S. Courts (AOUSC). One year after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was implemented on Oct. 17, 2005, total bankruptcy filings for calendar year 2006 dropped to 617,660, representing the lowest filing total since 613,465 total filings were recorded for the 12-month period ending Dec.31, 1988. The total filings for the 12-month period ending Dec. 31, 2006, represent a 70.28 percent decrease compared with the record total of 2,078,415 filings for the same period in 2005.

Consumer bankruptcies recorded the sharpest decrease; the 597,965 consumer filings during calendar year 2006 represented a 70.68 percent drop in filings from the record 2,039,214 filings made during the 12-month period ending Dec. 31, 2005. The 12-month filing total for 2006 was the lowest since the 549,612 filings were recorded for the 12-month period ending Dec. 31, 1988.  

'The final government statistics merely confirm what all in the bankruptcy world had already experienced: a historic drop-off in 2006 activity almost entirely due to the after-effect of the 2005 law changes,' said ABI Executive Director Samuel J. Gerdano. 'But as the debt burden on the household sector remains high, most expect consumer bankruptcies to bounce back by the end of this year,' he said.

While the number of consumer filings reached their lowest point since 1988, the 2006 calendar year consumer filings revealed a noticeable shift in the type of bankruptcies being filed by consumers. Largely the result of stricter requirements under BAPCPA, the 248,430 chapter 13 cases filed for the 12-month period ending Dec. 31, 2006, represented 41.55 percent of the overall consumer filing total. The 349,012 consumers who filed for chapter 7 during the 12-month period ending Dec. 31, 2006, comprised 58.37 percent of the total consumer filings for the 2006 calendar year. The filing pattern was vastly different from 2005, when there were 1,631,011 chapter 7 cases filed, representing 79.98 percent of total bankrupt consumer filings, while only 19.97 percent of consumer cases, representing 407,322 filings, were filed under chapter 13 during the 12-month period ending Dec. 31, 2005.

The 19,695 business filings during the 12-month period ending Dec. 31, 2006, were the lowest on record under the current statistics reporting system, which was implemented in 1980. The previous lowest business filing total for a 12-month period was recorded in 2004, with 34,317 business bankruptcies filed. The 2006 filing total also represents 49.78 percent decrease from the 39,201 business bankruptcy filings during the 12-month period ending Dec. 31, 2005.

The 177,599 total bankruptcies recorded during the 4th calendar quarter of 2006 (Oct.1-Dec. 31, 2006) represent a 73.39 percent drop from the 667,431 filings during the similar period in 2005. Total filings for the month of October registered a 90.23 percent drop from 2005 as 61,592 filings were recorded for the month in 2006 as compared to the 630,497 cases that were filed in October 2005 leading up to the implementation of BAPCPA that year. Despite the drop-off from the previous year, the 2006 4th calendar quarter filing total was the highest of any previous quarter for 2006 and represented a 3.63 percent increase over the 3rd quarter (July 1 – Sept. 30) total of 171,146.

The 172,013 consumer filings in the 4th quarter of 2006 represent a 73.72 percent decrease in comparison to the 654,633 consumer filings for the same quarter of 2005. The consumer filing total for the 4th calendar quarter did, however, represent a 3.58 percent increase from the previous total of 165,862 filings from the 3rd quarter of 2006.

Business filings, which totaled 5,586 for the 4th calendar quarter of 2006, represented a 56.35 percent decrease from the 12,798 filed in the same 3-month period in 2005 (Oct. 1-Dec. 31). Business filings did rise from the previous quarter as the 4th calendar quarter represented a 5.41 percent increase over 5,284 business filings reported during the 3rd quarter of 2006 (July 1- Sept. 30).

The chapter* breakdown of BUSINESS filings for the 3-month period ending Dec.31, 2006, is 3,567 chapter 7s, 1,170 chapter 11s, 74 chapter 12s and 763 chapter 13s.

The chapter breakdown of NONBUSINESS filings for the 3-month period ending Dec. 31, 2006, is 98,824 chapter 7s, 134 chapter 11s and 73,052 chapter 13s.

Districts with the LOWEST PERCENTAGE DECREASE in Total Filings for the 12-month period ending Dec. 31, 2006 (compared to the identical period in 2005):

  1. Western District of Tennessee: 45.29%
  2. Southern District of Georgia: 46.49%
  3. District of the Northern Mariana Islands: 46.88%
  4. Northern District of Georgia: 51.22%
  5. Middle District of Tennessee: 51.68%

Districts with the HIGHEST PERCENTAGE DECREASE in Total Filings for the 12-month period ending Dec. 31, 2006 (compared to the identical period in 2005):

  1. Eastern District of Louisiana: 85.14%
  2. Southern District of West Virginia: 84.01%
  3. Eastern District of Oklahoma: 83.75%
  4. Western District of Oklahoma: 81.79%
  5. Northern District of West Virginia: 81.21%

More information will be available at  ABI’s Statistics Page, http://www.abiworld.org/statistics.

###

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.

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