CREDIT CORNER

Bankruptcy Cases Continue to Break Federal Court Caseload Records

Total Bankruptcy Filings and Non-business Filings Hit Highs
The total number of bankruptcies and the total number of non-business bankruptcy cases filed in
Federal courts in the 12-month period ending June 30, 2003, once again broke records. Bankruptcy filings totaled 1,650,279, the largest number of cases ever filed in any 12-month period. According to data released today by the Administrative Office of the U.S. Courts, filings increased 9.6 percent over the 1,505,306 bankruptcy cases filed in the 12-month period ending June 30, 2002.

Bankruptcy filings first broke one million during the 12-month period ending June 30, 1996. Non-business or personal bankruptcy filings also reached an all-time high for any 12-month period. Non-business filings totaled 1,613,097 for the 12-month period ending June 30, 2003, up 10 percent from the 1,466,105 cases filed in the 12-month period ending June 30, 2002. In the same period, business filings fell to 37,182 from 39,201, a 5.2 percent decline. Since 1999, business filings have fallen 6.9 percent.

Filings by Chapter
Of the total number of bankruptcy filings in the 12-month period ending June 30, 2003, there were
1,165,993 Chapter 7 filings, a 10.7 percent increase over the 1,053,230 Chapter 7 filings for the same period in 2002. The next largest group of filings was Chapter 13 filings at 472,811, a 7.4 percent increase over the 440,231 filings in the 12-month period ending June 30, 2002. Chapter 12 filings rose 111.2 percent, from 367 in the 12-month period ending June 30, 2002, to 775 in the same 12-month period in 2003. Chapter 11 filings fell 7 percent, decreasing from 11,401 in 2002 to 10,602 in 2003.

 

Filings by Quarter
The number of bankruptcy cases filed during the third quarter of the Judiciary’s 2003 fiscal year
(April 1, 2002—June 30, 2003) totaled 440,257, up 9.9 percent from the 400,686 cases filed in third quarter 2002. This was a high for quarterly filings. The number of bankruptcies filed during the second quarter of fiscal year 2003 (January 1, 2003- March 31, 2003) was 412,968. Filings for the Judiciary’s first quarter of 2003 (October 1, 2002 –December 31, 2002) totaled 395,129.

Bankruptcy Chapters
Chapter 7 is designed to allow individuals to keep certain exempt property while the remaining property is sold to repay creditors. Under Chapter 13 bankruptcy, creditors may be repaid in installments, in full or in part, over a 3- to 5-year period. Chapter 11 provides for a business to continue operations while formulating a plan to repay its creditors. Chapter 12 is designed to meet the needs of financially distressed family farmers.

Source: Administrative Office of the U.S. Courts