RE: If times are that good,then why?
ABI PRESS RELEASES
Bankruptcies Increased by 19 Percent in 1997 to a Record High of 1.4 Million Filings
Contact: Mana Zarinejad
at (703) 739-0800
ALEXANDRIA, Va., March 2, 1998 - --
Bankruptcy filings for calendar year 1997
increased by 19.1 percent to a record high of
1,404,145 filings, compared to 1,178,555 in
1996.
The statistics were released Friday by the
Administrative Office of the U.S. Courts.
The record number of filings is driven by
consumer filings, which comprised more than
96 percent of all filings in 1997. Last year,
consumer or non-business filings rose to a
record high of 1,350,118 filings, a 20 percent
increase from 1996. By contrast, business
filings rose to 54,027, only about 1 percent up
from 1996.
When broken down by chapter,* there were
989,372 chapter 7 filings, an increase of 22
percent over 1996 figures. Chapter 13 filings
increased by 13.5 percent in 1997 to 403,025
filings. Chapter 11 filings decreased by 9.6
percent in 1997 to 10,765 filings. Chapter 12
filings also decreased in 1997, down 14
percent to 949 filings. "The sustained growth
in consumer bankruptcy filings correlates to
rising levels of household debt," said Samuel
J. Gerdano, executive director of the American
Bankruptcy Institute. "The numbers have
startled many in Congress, who intend to
examine whether changes in current law are
necessary."
Congressional hearings on the state of
bankruptcy and legislation aimed at reform of
the bankruptcy laws are scheduled to start in
March.
Nationwide, out of 94 federal judicial districts,
the Central District of California remained the
district reporting the greatest number of
filings, 118,335 for 1997, a 15.3 percent
increase over 1996. In addition, districts
reporting more than 30,000 total filings were:
the District of New Jersey, the District of
Maryland, the Eastern District of Virginia, the
Northern District of Illinois, the Northern and
Eastern Districts of California, the Middle
District of Florida and the Northern District of
Georgia.
Only two districts reported a decline in filings
in 1997: the Southern District of Alabama and
the Northern Mariana Islands.
The 10 districts posting the greatest
percentage increase among the 50 states from
1996 to 1997 are the Northern District of West
Virginia (45.9%), the District of Hawaii, the
Middle District of Pennsylvania (40.4%), the
District of Vermont (39.7%), the Southern
District of West Virginia (39.5%), the District of
Maine (37.3%), the District of Massachusetts
(34.6%), the Western District of Pennsylvania
(34.1%), the District of New Hampshire
(32.8%) and the District of Maryland (31.4%).
*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 and 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 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, typically used to budget some of the
debtor's future earnings under a plan through
which creditors are paid in whole or in part.
ABI is the largest multi-disciplinary,
non-partisan 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 5,700
attorneys, bankers, judges, professors,
turnaround specialists, accountants and other
bankruptcy professionals providing a forum for
the exchange of ideas and information. For
more information on ABI, visit ABI World at
abiworld.org.
For information and statistics collected
especially for the media and other researchers,
visit
abiworld.org.
Copyright c 1997 American Bankruptcy Institute.
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