ABI: Bankruptcies Rise to Highest Levels Since Law Change
ALEXANDRIA, Va. — In a mounting trend of more filings, the total number of U.S. bankruptcies filed during the first six months of this year grew by 29.2 percent over the same period in 2007, according to data released Wednesday by the Administrative Office of the U.S. Courts.
In fact, total filings reached 522,205 during the first half of 2008, compared with 404,090 cases filed over the same period in 2007.
"The continued rise in bankruptcies to their highest levels since Congress changed the law points to the growing strain on family budgets," explained Samuel Gerdano, the American Bankruptcy Institute's executive director
"We expect this trend to continue through the end of the year, with cases surging past 1 million by year end," he pointed out.
Filings by individuals or households with consumer debt increased 28.8 percent to 503,749 for the six-month period from the 2007 first-half total of 391,105.
The overall percentage of consumers filing for chapter 13 protection fell slightly from 38.4 percent during the first half of 2007 to 33.8 percent over the same period in 2008.
Meanwhile, the first-half percentage of chapter 7 consumer filers increased to 66.1 percent from the 61.6 percent recorded in the first half of last year.
Business filings for the six-month period ending June 30 totaled 18,456, representing a 42.1-percent increase over the first-half 2007 total of 12,985.
Chapter 7 business liquidations increased to 13,002 in the first half of 2008, a 54.7-percent increase over the 8,404 business chapter 7 filings during the same period in 2007.
Chapter 11 reorganizations also rose from 2,713 in the first half of 2007 to 3,470 in the same period of 2008, a 27.9-percent jump.
2Q Results
As for the second quarter, the 276,510 total filings represented a 12.5-percent increase from the first quarter 2008 filings of 245,695.
Business filings in the second quarter increased 11.8 percent to 9,743 over the 8,713 business filings in the first quarter.
Officials noted, however, that chapter 11 business filings decreased 8.5 percent in the second quarter of 2008 to 1,658 from 1,812 filings in the first quarter.
Moreover, consumer filings increased 12.6 percent from 236,982 recorded in the first quarter of 2008 to 266,767 in the second quarter.
Full-Year Filings
Continuing on, the 967,831 filings for the 12-month period ending June 30 represented a 28.9 percent climb from the same period in 2007, which totaled 751,056.
The bankruptcy filing rate per thousand U.S. residents totaled 3.15 for all chapters during the 12-month period, with 2 Americans per thousand filing for chapter 7 while 1.12 per thousand filed for chapter 13.
Tennessee was the state with the highest per capita filing rate in the country with 6.92 residents per thousand filing in all chapters, and this state also had the highest per capita filing rate for chapter 13 at 4.08.
The state with the highest per capita filing rate for chapter 7 bankruptcy was Michigan at 3.82 per thousand for the 12-month period.
Non-business filings for the 12-month time frame were up to 934,009 filings, a 28.4-percent jump from 727,167 total non-business filings in the same period in 2007.
Business filings for the 12-month period totaled 33,822, up 41.6 percent from the 23,889 bankruptcy petitions filed in the 12-month period ending of last year.
The 615,748 total chapter 7 filings for the 12-month time frame represent a 36.7-percent increase from the 450,332 filings from the same period in 2007.
Total chapter 13 filings increased 16.9 percent to 344,421 in the 12-month period ending June 30 from 294,693 in the same period last year.
Total chapter 11 filings also increased, rising 30.6 percent to 7,293 in 2008 from 5,586 in 2007.
Contrasting the upward trend, however, were chapter 12 filings, which decreased 18.7 percent from 386 in 2007 to 314 in 2008.