A Judgment Lien on Entireties Property Isn’t Avoidable in Illinois, Seventh Circuit Says
A judicial lien impairing a homestead exemption is avoidable in some states under Section 522(f), but not in others.
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July Total Bankruptcy Filings Increase 3 Percent from Last Year, Commercial Filings Increase 4 Percent
Total U.S. bankruptcy filings increased 3 percent in July 2019 from July 2018, according to data provided by Epiq Systems, Inc. Total filings registered 64,283 in July 2019, up from the July 2018 total of 62,241. The 61,025 consumer filings in July also represented a 3 percent increase from the previous year’s consumer total of 59,110. July 2019 business filings increased 4 percent to 3,258 from July 2018’s business total of 3,131. The 417 commercial chapter 11 filings in July 2019 were a 1 percent increase over the 413 commercial chapter 11 filings last July.
July Total Bankruptcy Filings Increase 3 Percent from Last Year, Commercial Filings Increase 4 Percent
Alexandria, Va.— Total U.S. bankruptcy filings increased 3 percent in July 2019 from July 2018, according to data provided by Epiq Systems, Inc. Total filings registered 64,283 in July 2019, up from the July 2018 total of 62,241. The 61,025 consumer filings in July also represented a 3 percent increase from the previous year’s consumer total of 59,110. July 2019 business filings increased 4 percent to 3,258 from July 2018’s business total of 3,131. The 417 commercial chapter 11 filings in July 2019 were a 1 percent increase over the 413 commercial chapter 11 filings last July.
“Amid increasing debt loads and growing global challenges, bankruptcy provides financial shelter for distressed consumers and businesses,” said ABI Executive Director Samuel J. Gerdano. “Congress recently passed legislation that will provide better access to the financial fresh start of bankruptcy for struggling small businesses, veterans and family farmers.”
The U.S. Senate on Aug. 1 passed the Small Business Reorganization Act of 2019 (H.R. 3311), the Honoring American Veterans in Extreme Need Act of 2019 (H.R. 2938) and the Family Farmer Relief Act of 2019 (H.R. 2336) by a voice vote. The three bills modernize the Bankruptcy Code to ensure that struggling veterans, Main Street businesses and family farmers have access to better tools for achieving a financial fresh start. ABI testified in support of the three bills, and the legislation will now proceed to President Trump for signature into law.
July’s total bankruptcy filings increased 5 percent in July from last month’s total of 61,079. Consumer filings also rose 5 percent in July from the 58,003 filings in June.
Commercial filings represented a 6 percent increase over last month’s total of 3,076. However, commercial chapter 11 filings represented a 2 percent decrease from the June total of 425.
The average nationwide per capita bankruptcy-filing rate in July was 2.50 (total filings per 1,000 per population), a slight decrease from the filing rate of 2.51 during the first six months of 2019. Average total filings per day in July 2019 were 2,962, a 4 percent decrease from the 3,072 total daily filings in July 2018. States with the highest per capita filing rates (total filings per 1,000 population) in July 2019 were:
1. Alabama (5.61)
2. Tennessee (5.39)
3. Georgia (4.31)
4. Mississippi (4.25)
5. Nevada (3.79)
ABI has partnered with Epiq Systems, Inc. in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media. Epiq Systems is a leading provider of managed technology for the global legal profession. To view the full monthly statistic tables provided by Epiq Systems, be sure to visit ABI’s Newsroom.
For further information about the statistics or additional requests, please contact ABI Public Affairs Manager John Hartgen at 703-894-5935 or jhartgen@abiworld.org.
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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 nearly 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.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.
Epiq Systems is a leading provider of managed technology for the global legal profession. Epiq Systems offers innovative technology solutions for electronic discovery, document review, legal notification, claims administration and controlled disbursement of funds. Epiq System’s clients include leading law firms, corporate legal departments, bankruptcy trustees, government agencies, mortgage processors, financial institutions, and other professional advisors who require innovative technology, responsive service and deep subject-matter expertise. For more information on Epiq Systems, Inc., please visit http://www.epiqsystems.com.
Individuals with Two-Year Gap in Medical Coverage Nearly Twice as Likely to File for Bankruptcy, According to Research Included in Summer ABI Law Review
Alexandria, Va. — Individuals who experienced a gap in medical care coverage over a two-year period were roughly twice as likely to file for bankruptcy as those who retained continuous coverage, according to an article in the Summer 2019 edition of the American Bankruptcy Institute (ABI) Law Review (Volume 27, No. 2). In their article “Moving Beyond Medical Debt,” Prof. Brook E. Gotberg of the University of Missouri School of Law (Columbia, Mo.) and Prof. Michael D. Sousa of the University of Denver Sturm College of Law (Denver, Colo.) detail their research looking at data from a national survey of adults from 2004 through 2014 that indicates that the principal predictor of consumer bankruptcy is a lapse in medical insurance coverage.
Gotberg and Sousa's study was funded in 2016 by ABI's Anthony H.N. Schnelling Endowment Fund to examine whether the expansion of Medicaid through the Affordable Care Act (ACA) has had a correlative effect on the rate of consumer bankruptcy filings across the country. “Most existing empirical studies attempt to quantify the percentage of consumer bankruptcies that are ‘caused’ by unmanageable medical indebtedness,” Gotberg and Sousa write. “This article addresses what we believe to be a more significant line of empirical inquiry, namely, the connection between health insurance coverage and consumer bankruptcy as a more precise measurement of how national health insurance programs may or may not affect bankruptcy filing rates.”
“These findings contribute to the ongoing debate regarding the Affordable Care Act and the provision of health insurance to low-income Americans, and the role consistent health insurance coverage plays in relation to the consumer bankruptcy system.”
Other articles included in the Summer 2019 ABI Law Review include:
- “Credit Card Debt and Consumer Bankruptcy: Can We ‘Nudge’ Our Way Out?” by Prof. Robert J. Landry III of Jacksonville State University's School of Business and Industry (Jacksonville, Ala.).
- “‘The Supreme Court’s Jevic Decision Regarding Structured Dismissals in Bankruptcy Is Wrong. What's a Lawyer to Do?” by Prof. Jeffrey Davis of the University of Florida Levin College of Law (Gainesville, Fla.).
- “Escape from Pandemonium: Reconciling § 363(F) and § 365(H) in Qualitech’s Shadow and Spanish Peaks’ Wake” by Amir Shachmurove of Troutman Sanders (Washington, D.C.).
ABI’s Law Review, published in conjunction with St. Johns University School of Law in Jamaica, N.Y., is among the most cited and respected scholarly publications in the bankruptcy community. Now in its 27th year, it has the largest circulation of any bankruptcy law review. Past issues of the Law Review have focused on a variety of timely insolvency issues, including chapter 11 reform, distressed sectors, single-asset cases, consumer bankruptcy, revised Article 9 of the Uniform Commercial Code and other topics.
Members of the press looking to obtain any of the articles from the Summer 2019 issue should contact John Hartgen at 703-894-5935 or jhartgen@abiworld.org.
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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 nearly 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.abi.org/calendar-of-events.
Bill Raising Debt Ceiling for Family Farm Bankruptcies Heads to White House
With farm bankruptcies rising and agricultural debt loads soaring, the U.S. Senate on Thursday passed a bill that will make it easier for more farmers with larger amounts of debt to file for bankruptcy protection, Reuters reported. The bipartisan bill — H.R. 2336, the "Family Farmer Relief Act of 2019" — raises the ceiling on how much debt producers who file for chapter 12 bankruptcy can have, to $10 million from the previous $4 million. It costs far more now to run a U.S. farm than it did 30 years ago, according to U.S. Department of Agriculture data. Without this change to the law, bankruptcy experts say, farmers whose debts exceed $4.15 million are forced to use chapter 11 protection, which is more costly and onerous. ABI testified in support of the bill. A Reuters analysis of Federal Deposit Insurance Corporation data found that — after years of building up their farm lending portfolios in the wake of the U.S. housing meltdown of the late 2000s — top Wall Street banks are now pulling back from the sector as farm incomes are falling and farm loan delinquency rates are rising. Read more.
In addition to the Family Farmer Relief Act, the Senate on Thursday also passed H.R. 3311, the Small Business Reorganization Act; H.R. 2938, the Honoring American Veterans in Extreme Need Act (HAVEN Act); and H.R. 3304, the National Guard and Reservist Debt Relief Extension Act. ABI testified in support of H.R. 2938, H.R. 3311 and H.R. 2336. All the bills passed the U.S. House of Representatives and are non-controversial. The bills received unanimous consent to proceed to passage. The legislation will now be sent to President Trump to be signed into law. Click here to read ABI’s press release.
Senate Passes Four Bipartisan, Bicameral Bankruptcy Bills
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Bill Would Let Cash-Strapped Injured Veterans Keep Disability Money During Bankruptcy
Congress passed a bill that would extend a lifeline to financially struggling injured veterans, enabling them to spend disability payments instead of using them to pay down debt in bankruptcy protection, WSJ Pro Bankruptcy reported. The Senate yesterday passed four bankruptcy bills that included the Honoring American Veterans in Extreme Need Act (HAVEN Act) that consumer advocates say fixes a mistake written into a 2005 overhaul of the country’s bankruptcy rules. The House passed the bill last week. It now goes to the White House for President Trump’s signature where he is expected to sign the bill. The newly passed bill excludes disability payments from the Department of Veterans Affairs and Department of Defense to veterans or their dependent survivors from the classification of disposable income. The bill would provide relief for military veterans, who face higher rates of homelessness, mental-health problems and unaffordable debt, including from medical expenses for combat-related injuries. A 2017 study from Stanford University found that veterans make up a larger portion of people who have filed for bankruptcy protection. Read more.
The Senate yesterday also passed H.R. 3311, the Small Business Reorganization Act; H.R. 2336, the Family Farmer Relief Act; and H.R. 3304, the National Guard and Reservist Debt Relief Extension Act. ABI testified in support of the HAVEN Act (H.R. 2938), H.R. 3311 and H.R. 2336. All the bills passed the U.S. House of Representatives last week and are non-controversial. The bills received unanimous consent to proceed to passage. The legislation will now be sent to President Trump to be signed into law. Click here to read ABI’s press release.
U.S. Appeals Court Won’t Make Student Loans Easier to Discharge
A Texas woman can’t unload thousands of dollars in unpaid student loans through bankruptcy, a federal appeals court said, a setback for consumer lawyers hoping her case could weaken the high bar for student borrowers to discharge educational debt, WSJ Pro Bankruptcy reported. The U.S. Court of Appeals for the Fifth Circuit on Tuesday ruled against Vera Frances Thomas, who has struggled to maintain employment because of a degenerative nerve disease and sought relief from more than $7,800 in student debt. The ruling comes as some judges, experts and politicians re-evaluate the legal hurdles preventing individuals in difficult financial straits from using bankruptcy to leave behind student loans. The appellate court defended a legal test dating back to the late 1980s that requires borrowers seeking education-related bankruptcy relief to show they are totally incapable of repaying their student debt. Consumer advocates who filed papers supporting Thomas said that the test is outdated and came about before significant changes to modern student loan programs. “The consequence of the…test is that sympathetic debtors like Ms. Thomas are held to the same standard as debtors who are less sympathetic. But that is an outcome for Congress to address, should it desire,” wrote Circuit Judge Edith H. Jones. Read more.
For further analysis on this case, be sure to read today’s Rochelle’s Daily Wire column.
