Bankruptcy Filings Show Sharp Increase In 1995

In the 12-month period ended December 31, 1995, bankruptcy filings showed an 11.3 percent increase compared to the same period in 1994, according to statistics released by the Administrative Office of the U.S. Courts. Prior to 1993, annual bankruptcy filings had increased every year for 8 years. This reverses the 2-year trend of annual decreases in filings in which filings dropped 9.9 percent in 1993 and 4.9 percent in 1994. The total number of bankruptcy filings in federal courts soared above the 900,000 mark to 926,601, as compared with 832,829 for the same 12-month period ended December 31, 1994. Among the U.S. district courts, the Central District of California led with 82,314 filings. The largest percentage increase was in the Eastern District of Arkansas, with a 45.6 percent increase. Among the circuits, the Ninth Circuit, which includes the state of California, had the highest number of filings at 215,631, and the Third Circuit showed the largest overall percentage increase in filings at 19.1 percent. Of the total number of bankruptcy filings for calendar year 1995, 626,150 were Chapter 7 filings, an increase of 58,910 (10.4 percent) over the 567,240 filings in calendar 1994. The next largest group of filings were Chapter 13 filings at 286,588, a rise of 36,711 (14.7 percent) over 1994's 249,877. There were 12,904 Chapter 11 filings for a drop of 1,869 (12.7 percent), and Chapter 12 filings rose slightly, from 900 in 1994 to 926 in 1995. 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 full or in installments, over a three- to five-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. For the Judiciary, December 31 was also the end of the first quarter of fiscal year 1996. In the first quarter, 244,494 bankruptcy cases were filed in federal courts, an increase of 42,876 (21.3 percent) over the first quarter of FY95. Total business filings numbered 12,891, and non-business filings added up to 231,603. A breakdown of the latest data on bankruptcy filings follows. Table A Business and Nonbusiness Bankruptcy Cases Filed, By Chapter During the Three-Month Period Ended December 31, 1995 Total Filings Chapter 7 Chapter 11 Chapter 12 Chapter 13 244,494 163,535 3,378 236 77,333 Total Business Chapter 7 Chapter 11 Chapter 12 Chapter 13 12,891 7,138 3,072 236 2,433 Total Non-Bus Chapter 7 Chapter 11 Chapter 13 231,603 156,397 306 74,900 Table B Quarterly Bankruptcy Filings 3-Month Period Ending Total Filings Dec. 31, 1995 244,494 SEPT. 30, 1995 233,593 JUN. 30, 1995 235,302 MAR. 31, 1995 212,626 DEC. 31, 1994 201,618 SEPT. 30,1994 208,187 JUN. 30, 1994 216,213 MAR. 31, 1994 206,565 DEC. 31, 1993 206,570 SEPT. 30, 1993 215,498 JUN. 30, 1993 229,406 MAR. 31, 1993 222,694 DEC. 31, 1992 228,562 SEPT. 30, 1992 236,810 JUN. 30, 1992 250,622 MAR. 31, 1992 252,733 DEC. 31, 1991 234,383 SEPT. 30, 1991 231,743 JUN. 30, 1991 246,430 MAR. 31, 1991 231,017 DEC. 31, 1990 209,798 SEPT. 30, 1990 192,555 *Because of ongoing corrections to the bankruptcy database, the quarterly data may not total to the most recent annual figures. ----- from The Third Branch -- February 1996 ----- Brought to you by - The 'Lectric Law Library The Net's Finest Legal Resource For Legal Pros & Laypeople Alike. http://www.lectlaw.com