ALEXANDRIA, Va. — The American Bankruptcy Institute found
total filings in the United States for October increased 16 percent compared to
September.

According to data provided by Epiq Systems, October
bankruptcy filings totaled 101,278, up from the 87,522 filings registered in
September.

ABI determined the 96,498 total noncommercial filings for
October represented a 16-percent increase from the September noncommercial
filing total of 83,493. Total commercial filings for October were 4,780,
representing a 19-percent jump from the 4,029 filings in September.

Officials also noted commercial Chapter 11 filings also
increased in October as the 704 filings represented a 3-percent lift the 681
filings in September.

"Despite this uptick, total bankruptcy filings for the year
remain on pace for about 1.2 million new cases, the lowest total since before
the financial crisis in 2008," said ABI executive director Samuel Gerdano.

"Sustained low interest rates and weak consumer spending by
households deleveraging are helping to restrain bankruptcy filing rates,"
Gerdano continued.

ABI went on to mention the 101,278 total bankruptcy filings
in October represented a 9-percent decrease from the 111,533 filings registered
last October.

Total commercial filings for October were 4,780,
representing a 16-percent decrease from the 5,719 filings during the same
period in 2011. The October commercial Chapter 11 filing total of 704
represented a 23-percent drop from last October's total of 913.

Furthermore, the 96,498 total noncommercial filings for
October represented a 9-percent drop from the October 2011 noncommercial filing
total of 105,814.

The average nationwide per capita bankruptcy-filing rate
through the first 10 calendar months of 2012 was 3.96 (total filings per 1,000
per population). Average total filings per day in October were 3,267, a
9-percent decrease from the 3,598 total daily filings in October of last year.

States with the highest per capita filing rate (total
filings per 1,000 population) through the first 10 months of 2012 were:

1. Tennessee (7.05)
2. Nevada (6.76)
3. Georgia (6.54)
4. Alabama (5.98)
5. Utah (5.98)

ABI has partnered with Epiq Systems, a provider of managed
technology for the global legal profession, in order to provide the most
current bankruptcy filing data for analysts, researchers and members of the
news media.

Article Examines Whether Bankruptcy-Specific State
Exemptions Are Constitutional

While officials said the bankruptcy code does not
specifically authorize states to enact bankruptcy-specific exemptions, an
article in the November ABI Journal
found that a number of states have chosen to do so and have been upheld in the
circuit courts.

The institute explained the bankruptcy clause in the U.S.
Constitution grants Congress the power to establish uniform bankruptcy laws
throughout the U.S., and the supremacy clause provides that laws that are
passed by Congress are to be the supreme laws of the land.

Heather Forrest of Jackson Walker LLP in Dallas wrote the
article titled, "Are Bankruptcy-Specific State Exemptions Constitutional?"
Forrest indicated, "With these two provisions in mind, the question becomes
whether ‘a state may enact an exemption scheme that applies only to debtors in
bankruptcy."

Forrest points out that Michigan has adopted two separate
exemption statutes. Section 600.6023 exempts certain property from levy and
sale by a judgment creditor, including a homestead not to exceed a value of
$3,500. Section 600.5451, on the other hand, allows a debtor in bankruptcy
separate exemptions, including a homestead exemption not to exceed $30,000 in
value or $45,000 in value if the debtor or a dependent of the debtor is over
age 65 or is disabled.

The U.S. Court of Appeals for the Sixth Circuit recently
upheld that legislation, finding that the state's bankruptcy-specific
exemptions are constitutional, according to Forrest.

"While the Supreme
Court has not yet been called upon to decide whether states have the authority
to enact bankruptcy-specific exemptions, it is clear that the Sixth Circuit
believes that this type of legislation is constitutional, and it is not alone,"
Forrest wrote.

"The Fourth Circuit and the BAP (Bankruptcy Appellate Panel)
for the Ninth Circuit have also issued rulings finding or indicating that these
types of statutes are constitutional," she continued.

To obtain a copy of this article published in the November
edition of the ABI Journal, contact John Hartgen at (703) 894-5935 or
jhartgen@abiworld.org.