FOR IMMEDIATE RELEASE
Contact: Pam Shepherd (703) 739-0800 pshepherd at abiworld.org
New Bankruptcy Filings Break Quarterly Record
August 24, 2001, Alexandria, Va. - The number of new bankruptcies filed during the second quarter of calendar year 2001 (April 1 to June 30) rose 24.5 percent over the same period a year ago. Filings increased from 321,729 to 400,394, making this the highest three-month period ever, according to data released today by the Administrative Office of the U.S. Courts.
Filings are now on track to surpass the recording-breaking year of 1998, when 1,442,549 new cases were filed. In the first six months of this year, 767,235 new cases were filed. That is an increase of 21 percent over the first half of last year, when 634,064 cases were filed, and an increase of 5.4 percent over the first half of 1998, when 727,578 cases were filed. The number of second quarter bankruptcies also eclipses the previous three-month record during the second quarter of 1998, when 373,460 new cases filed.
"The figures for the first half of this year are alarming, if not shocking," said Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute (ABI). "While we expected the second quarter to be high, given historic patterns, breaking the 400,000 mark sets a pace for a new bankruptcy record this year, shattering the 1998 record of 1.4 million total cases."
Of the total number of bankruptcy filings for the 12-month period ending June 30, there were 972,659 chapter 7 filings, a 9.8 percent increase from 885,447 chapter 7 bankruptcies filed in the same period in 2000. The next largest group of filings is chapter 13. These increased by 6 percent from 380,770 for the same period in 2000 to 403,418. Chapter 11 filings increased 3.3 percent from 9,947 to 10,272. Chapter 12 filings saw a significant decrease, falling 72 percent in the 3-month period from to 732 to 206. This drop is mainly due to the expiration of chapter 12 on July 1, 2000.
Of the total number of bankruptcy filings for the 3-month period ending June 30, chapter 7 filings increased by 30.3 percent from 225,024 to 293,228. Chapter 13 filings also saw an increase during the first quarter. They rose by 11 percent from 93,783 to 104,154. Chapter 11 filings showed a 4.5 percent increase from 2,711 to 2,832. And as in the 12-month period, chapter 12 filings drastically decreased by 20.4 percent from 201 in the second quarter 2000 to 160 in the second quarter 2001.
The chapter* breakdown of non-business filings for the 12-month period ending June 30, 2001, is: 950,724 chapter 7s, 745 chapter 11s, and 397,996 chapter 13s.
The chapter breakdown of non-business filings for the 3-month period ending June 30, 2001, is: 287,040 chapter 7s, 218 chapter 11s, and 102,804 chapter 13s. Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period from July 1, 2001 to June 30, 2001 (compared to the identical period in 2000)
1. District for the Northern Mariana Islands 43.8% 2. District of Guam 28.4% 3. Eastern District of North Carolina 25.2% 4. Northern District of Mississippi 25.1% 5. Southern District of West Virginia 23.9% 6. Eastern District of Arkansas 23.5% 7. Northern District of Iowa 22.4% 8. Southern District of Alabama 21.5% 9. Southern District of Iowa 20.6%
District of Utah 20.6% 10. Middle District of Tennessee 20.4%
Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period from July 1, 2001 to June 30, 2001 (compared to the identical period in 2000)
1. District of Delaware 18.4% 2. Northern District of California 15.9% 3. District of Puerto Rico 12 % 4. Central District of California 7.5% 5. Southern District of California 6.3% 6. District of Columbia 6 % 7. District of Hawaii 4.5% 8. Eastern District of California 4 % 9. District of New Hampshire 1.9% 10. District of Rhode Island 1.7%
More information will be available on Monday at http://www.abiworld.org/stats/newstatsfront.html.
ABI is the largest multi-disciplinary, non-partisan 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 8,000 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 ABI World at http://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 12 expired on June 30, 2000, and was not reenacted until June 26, 2001.
Chapter 13 of the Bankruptcy Code is available for an individual with regular income whose debts do not exceed specific amounts; typically used to budget some of the debtor's future earnings under a plan through which creditors are paid in whole or in part.
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