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Due to a continued decline in personal bankruptcies, total bankruptcy filings for calendar year 2016 will likely approach 794,000, representing a 6 percent decrease from the 844,495 total filings in 2015, according to an analysis from ABI's Ed Flynn. Based on data from the Administrative Office of the U.S. Courts (AOUSC) for the first 9 months and PACER data for the final 3 months of the year, Flynn estimated the following filing totals:

- Chapter 7s: 488,000 (down nearly 9 percent from 2015)

- Chapter 13s: 297,000 (down 1-2 percent from 2015)

- Chapter 12s: 460 (increase of 13 percent from 2015)

- Chapter 11s: 7,300 (nearly the same as in 2014 and 2015)

Gathering data from New Generation Research, Flynn found that there were more than 35 chapter 11 cases with over $1 billion in assets filed in 2016 — the most since 2009. Nearly one-half of these very large cases were oil and gas or energy-related, according to Flynn. Leading filing locations for large chapter 11 cases in 2016 were:

- District of Delaware: 17

- Southern District of Texas: 8

- Southern District of New York : 7

- Eastern District of Missouri: 4

Flynn, who previously worked for more than 30 years for the Executive Office for U.S. Trustees and the AOUSC, is the "Bankruptcy by the Numbers" columnist in ABI Journal. Click here to read his current column, "A Closer Look at State Filing Trends," appearing in the January edition of the Journal. 

Full charts and analysis of the 2016 bankruptcy filings will be available later this week on the Statistics page of the ABI Newsroom. 

Bankruptcy asset investigators — lawyers and accountants who serve as chapter 7 bankruptcy trustees — are learning what most teenagers have already figured out, which is that you can’t always believe what you see on Facebook and Twitter, according to a commentary in the Wall Street Journal today. “Gotcha” moments in which they discover people in bankruptcy posing in glamorous-looking jewelry, piloting boats and ATVs and even displaying buckets full of cash have fallen flat as the items turn out to be fake, or not theirs at all. Last month, a New Mexico trustee was questioning a bankrupt man about his hobbies, pushing him to discuss his fishing gear and identify his preferred brands, says the bankrupt man’s lawyer, Michael Daniels. The impatient trustee finally snapped, “You were using a much nicer reel on your Facebook page!” Daniels recalls. The man replied that he had borrowed gear for the shot. This October, when Ido Alexander saw photos a young man had posted on social media, he thought he had hit the bankruptcy jackpot. Alexander, a Florida lawyer working for a court-appointed trustee, dispatched an appraiser to the man’s home to inspect the expensive-looking gold chains and other jewelry he had been posing in, which he hadn’t declared as assets in court filings. The appraiser made another discovery that is becoming all too common in the age of social-media braggadocio. “At the end of the day, it was really costume jewelry,” Alexander says.

Borrowers are beginning to win battles to erase some student loans in bankruptcy court, overcoming stiff obstacles that have generally blocked that path except in extreme cases of financial hardship, the Wall Street Journal reported today. Since March, several bankruptcy courts have allowed borrowers to cancel private student loans with a new legal argument that relies on vague wording about the legal definition of a student loan. Without proving extreme hardship, the Bankruptcy Code says that a borrower can’t discharge a loan made for an “educational benefit.” This language has opened a window to cancel loans for students who argue that their loans falls outside this category of debt. Such reasoning has been applied to loans obtained to attend schools without accreditation or to study for a bar exam. The argument only applies to a slice of the private student-loan market, which makes up less than 10 percent of the more than $1.3 trillion in outstanding student debt. The federal government dominates the student-loan market and isn’t as vulnerable in bankruptcy proceedings. Read more. (Subscription required.) 

Now available in the ABI Bookstore: Pick up your copy of the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition!