Bankruptcy Filings Drop 8.5% in Calendar Year 1999; First Year in Last Four to Show Decline
March 6, 2000, Alexandria, Va.- The total number of bankruptcies filed during the 1999 calendar year totaled 1,319,465, a decrease of 8.5 percent from the previous calendar year, when filings totaled 1,442,549, according to data released by the Administrative Office of the U.S. Courts. The total number of filings for the fourth quarter of 1999 was 318,634, down 1.5 percent from the third quarter of 1999 and down nearly 10 percent from the same period a year earlier.
The number of new filings in 1999 was the first year in the last four not to set a new national record for bankruptcies.
Of the total number of bankruptcy filings for the 1999 calendar year, there were 927,074 chapter 7 filings, a 10.5 percent decrease from the 1,035,696 filings for the same period in 1998. The next largest group of filings in 1999 was chapter 13 filings at 382,214, which dropped 3.9 percent from 397,619 filings in calendar year 1998. Chapter 11 filings rose to 9,315 in calendar year 1999, up from 8,386 in 1998. Chapter 12 filings also increased slightly in this period from 807 in 1998 to 834 in 1999.
The tidal wave of new bankruptcies appears to have subsided somewhat, said Samuel J. Gerdano, Executive Director of the ABI. However, the high rate of filing demonstrates that U.S. consumers are still under financial stress, notwithstanding a healthy economy.
Legislation pending in Congress would limit access to bankruptcy for some consumers while requiring greater repayment of debts.
Personal bankruptcies account for 97.12 percent of the total new cases filed in the last 12-months. These cases decreased to 1,281,581 in the 1999 calendar year down 8.3 percent when compared to the 1998 calendar year. Personal filings decreased during the fourth quarter to 309,835 a 9.7 percent drop from the third quarter of 1999.
The chapter* breakdown of personal filings for the 1999 calendar year is: 904,564 chapter 7s; 706 chapter 11s and 376,311 chapter 13s. Chapter 7 bankruptcies represent 70.6 percent of all personal bankruptcies during the calendar year period.
The chapter breakdown of personal filings for the fourth quarter is: 215,768 chapter 7s; 178 chapter 11s and 93,889 chapter 13s. Chapter 7 bankruptcies represent 69.6 percent of all personal bankruptcies during the three-month period.
Business bankruptcies continued their decline in the 1999 calendar year, dropping 14.6 percent over the last year to 37,884. However, business filings increased during the fourth quarter by 7.2 percent to 9,637.
The chapter breakdown of business filings for the calendar year 1999 is: 22,510 chapter 7s; 8,609 chapter 11s; 834 chapter 12s and 5,903 chapter 13s.
The chapter breakdown of business filings for the fourth quarter is: 5,516 chapter 7s; 2,079 chapter 11s; 164 chapter 12s and 1,576 chapter 13s.
ABI is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters of insolvency. ABI is not an advocacy group. Instead, ABI was founded in 1982 to provide Congress, its members, journalists and the public-at-large with an unbiased analysis of bankruptcy issues. ABI?s membership includes over 7,000 attorneys, bankers, judges, lenders, professors, turnaround specialists, accountants and other bankruptcy professionals providing a forum of the exchange of ideas and information. For additional information visit ABI World at abiworld.org.
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 whatever non-exempt property the debtor has to give the individual debtor a fresh start through the discharge in bankruptcy.
Chapter 11 of the Bankruptcy Code is available for both consumer and business debtors. Its purpose is to rehabilitate a business as a going concern or recognize 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, typically used to budget some of the debtor?s future earnings under a plan through which creditors are paid in whole or in part.
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