Rate of U.S. Households Filing for Bankruptcy Plunges in 2006

Contact: John Hartgen

            

703-739-0800

            

jhartgen@abiworld.org

RATE OF

w:st='on'>U.S. HOUSEHOLDS FILING FOR
BANKRUPTCY PLUNGES
IN 2006

May 9, 2007, Alexandria,
Va. — The frequency of U.S. households filing for
bankruptcy cooled dramatically in 2006 to one personal bankruptcy for
every 208 households in calendar year 2006. The figure represents more
than a threefold decrease from the number of households that filed for
bankruptcy in calendar year 2005, in which there was an average of one
filing for every 60 households.

The drop-off in the frequency
of filings per household is consistent with the overall decrease in
consumer bankruptcies in 2006, which fell to their lowest levels since
the 1980s. The record levels experienced in 2005 are largely
attributable to families looking to file for bankruptcy protection prior

to the implementation the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 (BAPCPA). Most provisions of the new law became
effective on Oct. 17, 2005.

“Notwithstanding the drop

in bankruptcy filings last year, many American families are still facing

financial stress,” said ABI Executive Director Samuel J. Gerdano.
“Rising levels of household debt and declining home values could
lead to higher bankruptcies this year.”

The data can be viewed at
title='http://www.abiworld.org/stats'
href='http://www.abiworld.org/stats'>
color='#0000ff' size='3'>http://www.abiworld.org/stats. 

The table, based on data from the Administrative Office of the U.S.
Courts (2005 nonbusiness bankruptcies as of December 31, 2006) and the
U.S. Bureau of the Census (
w:st='on'>U.S. household unit estimates

as of July 1, 2005), ranks households per filing by state and
nationally. The five states with the highest bankruptcy
household-per-filing rates are
w:st='on'>Tennessee,
w:st='on'>Georgia,
w:st='on'>Alabama, Indiana
and
w:st='on'>Arkansas. States with the lowest rates

include Maine,
w:st='on'>Hawaii, Vermont,
Alaska, as well as the
w:st='on'>District of
Columbia. By contrast, states with the highest
bankruptcy household-per-filing rates in calendar year 2005 were
Indiana,
w:st='on'>Ohio, Utah,
Tennessee and
w:st='on'>Oklahoma. The
states with the lowest rates in 2005 included South

Carolina, Alaska,
Hawaii and
w:st='on'>Vermont, as well as the
w:st='on'>District of
Columbia.

###

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 nearly 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
title='http://www.abiworld.org/conferences.html'
href='http://www.abiworld.org/conferences.html'>
size='3'>http://www.abiworld.org/conferences.html.