Contact:
Hartgen
(703) 739-0800
color='#0000ff'>jhartgen@abiworld.org
BANKRUPTCY
FILINGS DURING FIRST THREE QUARTERS OF 2006 DROP OFF NEARLY ONE MILLION
FROM PREVIOUS YEAR
size='3'>December 5, 2006, Alexandria, Va.—
size='3'>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.
size='3'>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
size='3'>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):
- District of the
Islands
- District of Vermont:
23.10%
- Northern District of
Indiana: 26.32%
- Eastern District of Michigan:
28.07%
- Western District
of
size='3'>: 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):
- Eastern District of Louisiana:
51.78%
- District of Utah:
51.41%
- District of Arizona:
50.92%
size='3'>
- District of New Mexico:
49.10%
size='3'>
- Northern District of West
Virginia: 45.76%
###
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
face='Times New Roman' color='#0000ff'
size='3'>http://www.abiworld.org/conferences.html
face='Times New Roman' size='3'>.
*Definitions from
Bankruptcy Overview: Issues, Law
and Policy, by the
American Bankruptcy Institute.
size='3'>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.
size='3'>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.
size='3'>Chapter 12 of the Bankruptcy
Code is designed to give special debt relief to a family farmer with
regular income from farming.
size='3'>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.