Contact: John Hartgen
703-739-0800
TOTAL U.S. BANKRUPTCIES IN FIRST HALF OF 2008 UP 29
PERCENT FROM A YEAR AGO
August 27, 2008, Alexandria, Va.- The total number of U.S.
bankruptcies filed during the first six months of 2008 increased 29.2
percent over the same period in 2007, according to data released today
by the Administrative Office of the U.S. Courts. Total filings reached
522,205 during the first half of the calendar year of 2008 (January
1-June 30), compared to 404,090 cases filed over the same period in
2007.
“The continued rise in bankruptcies to their highest levels
since Congress changed the law points to the growing strain on family
budgets,” said ABI Executive Director
face='Times New Roman' size='3'>Samuel J. Gerdano. “We
expect this trend to continue through the end of the year, with cases
surging past 1 million by year end.”
Filings by individuals or households with consumer debt increased
28.8 percent to 503,749 for the six-month period ending June 30, 2008,
from the 2007 first-half total of 391,105. The overall percentage of
consumers filing for chapter 13 protection fell slightly from 38.4
percent during the first half of 2007 (January 1-June 30) to 33.8
percent over the same period in 2008. Conversely, the first-half 2008
percentage of chapter 7 consumer filers increased to 66.1 percent from
the 61.6 percent recorded in the first half of 2007.
Business filings for the six-month period ending June 30, 2008,
totaled 18,456, representing a 42.1 percent increase over the first-half
2007 total of 12,985. Chapter 7 business liquidations increased to
13,002 in the first half of 2008, a 54.7 percent increase over the 8,404
business chapter 7 filings during the same period in 2007. Chapter 11
reorganizations also rose from 2,713 in the first half of 2007 to 3,470
in the same period of 2008, a 27.9 percent increase.
The 276,510 total filings for the second calendar quarter 2008 (April
1-June 30) represented a 12.5 percent increase from the first quarter
2008 (Jan. 1-March 31) filings of 245,695. Business filings in the
second quarter of 2008 increased 11.8 percent to 9,743 over the 8,713
business filings in the first quarter. Of note, however, is that chapter
11 business filings decreased 8.5 percent in the second calendar quarter
of 2008 to 1,658 from the 1,812 filings of the first quarter of 2008.
Consumer filings increased 12.6 percent from 236,982 recorded in the
first quarter of 2008 to 266,767 in the second quarter.
The 967,831 total filings for the 12-month period ending June 30,
2008, represented a 28.9 percent from the same period in 2007, which
totaled 751,056. The bankruptcy filing rate per thousand U.S. residents
totaled 3.15 for all chapters during the 12-month period ending June 30,
2008, as 2.0 Americans per thousand filed for chapter 7 while 1.12 per
thousand filed for chapter 13 bankruptcy. Tennessee was the state with
the highest per capita filing rate in the country with 6.92 residents
per thousand filing in all chapters, and also had the highest per capita
filing rate for chapter 13 filings at 4.08. The state with the highest
per capita filing rate for chapter 7 bankruptcy was Michigan at 3.82 per
thousand for the 12-month period ended June 30, 2008.
Nonbusiness filings for the 12-month period ending June 30, 2008,
were up to 934,009 filings, a 28.4 percent increase from the 727,167
total nonbusiness filings over the same period in 2007. Business filings
for the 12-month period ending June 30, 2008, totaled 33,822, up 41.6
percent from the 23,889 bankruptcy petitions filed in the 12-month
period ending June 30, 2007.
The 615,748 total chapter 7 filings for the 12-month period ending
June 30, 2008, represent a 36.7 percent increase from the 450,332
filings from the same period in 2007. Total chapter 13 filings increased
16.9 percent to 344,421 in the 12-month period ending June 30, 2008,
from 294,693 in the same period last year. Total chapter 11 filings also
increased, rising 30.6 percent to 7,293 in 2008 from 5,586 in 2007.
Contrasting the upward trend, however, were chapter 12 filings, which
decreased 18.7 percent from 386 in 2007 to 314 in 2008.
BUSINESS FILINGS for the 3-month period ending June 30, 2008,
totaled 9,743, up 45.3 percent from the 6,705 bankruptcy business cases
filed in the same period in 2007. NON-BUSINESS FILINGS for the 3-month
period ending June 30, 2008, increased 30.9 percent from 203,744 in 2007
to 266,767 in 2008.
The chapter* breakdown of BUSINESS filings for the 3-month period
ending June 30, 2008, is: 7,043 chapter 7s, 1,658 chapter 11s, 85
chapter 12s and 940 chapter 13s.
The chapter breakdown of NON-BUSINESS filings for the 3-month period
ending June 30, 2008, is: 180,353 chapter 7s, 230 chapter 11s and 86,184
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
11,700 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
face='Times New Roman'>www.abiworld.org. For additional
conference information, visit
href='http://www.abiworld.org/conferences.html'>
color='#0000ff'>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.