Bankruptcy growth rate slows; business filings up for the quarter

A slight change

According to the American Bankruptcy Institute, the number of filings, however, was 0.4 percent lower than the record 1,661,966 bankruptcy cases filed during fiscal year 2003, the 12-month period ending Sept. 30.

Bankruptcy filings typically lag general economic conditions by 12 to 18 months, ABI stated in a news release.

Nonbusiness filings for March 2004 totaled 1,618,062, up 2.8 percent from the total nonbusiness filings of 1,573,720 filings in the 12-month period ending March 31, 2003.

Business filings in March 2004 totaled 36,785, down 2 percent from the 37,548 business filings in the 12-month period ending March 31, 2003.

“Consumer bankruptcies continued their upward arc, though at a slower pace to start this year”, said Samuel J. Gerdano, executive director of ABI, in the news release.

“The continued decline in business bankruptcies reflects an improved economic climate for business, aided by sustained low interest rates,” he added.

The number of bankruptcies filed during the second quarter of the fiscal year 2004 (Jan. 1, 2004 -March 31, 2004) was 407,572.

That is up 3.6 percent up from the 393,348 filings for the first quarter of fiscal year 2003 (Oct. 1, 2003 –Dec. 31, 2003). However, this number is down 1.3 percent from the 412,968 filings in the second quarter of fiscal year 2003 (Jan. 1, 2003-March 31, 2003).

Increased filings

Filings increased under all bankruptcy chapters, except Chapter 12. Chapter 7 filings increased 3.6 percent, from 1,135,436 in 2003 to 1,176,654 in the 12-month period ending March 31, 2004. Chapter 13 filings rose 0.3 percent, from 464,369 at the end of March 2003 to 465,878 in 2004. Chapter 11 filings rose 8.6 percent, from 10,722 in 2003 to 11,649 in 2004. Only Chapter 12 filings fell, dropping 9.3 percent from 632 in March 2003 to 573 in March 2004.

Business filings for the three-month period ending March 31, 2004, totaled 10,566, up 19.9 percent from the 8,814 bankruptcy business cases filed in the same period in 2003.

Nonbusiness filings for the three-month period ending March 31, 2004 decreased 1.8 percent from 404,154 in 2003 to 397,006 in 2004.

The chapter breakdown of business filings for the three-month period ending March 31, 2004, is: 290,689 Chapter 7s, 4,735 Chapter 11s, 18 Chapter 12s and 112,101 Chapter 13s.

The chapter breakdown of nonbusiness filings for the three-month period ending March 31, 2004, is: 285,787 Chapter 7s, 280 Chapter 11s and 110,939 Chapter 13s.

ABI

American Bankruptcy Institute was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues.

American Bankruptcy Institute membership includes more than 10,250 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information.

American Bankruptcy Institute is online at www.abiworld.org.

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