BANKRUPTCY FILINGS BREAK QUARTERLY RECORD

August 24, 2001

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The American Bankruptcy Institute (ABI) reports that the number of new bankruptcies filed during the second quarter of calendar year 2001 (April 1 to June 30) rose 24.5 percent over the same period a year ago. Filings increased from 321,729 to 400,394, making this the highest three-month period ever, according to data released today by the Administrative Office of the U.S. Courts.

Filings are now on track to surpass the recording-breaking year of 1998, when 1,442,549 new cases were filed. In the first six months of this year, 767,235 new cases were filed. That is an increase of 21 percent over the first half of last year, when 634,064 cases were filed, and an increase of 5.4 percent over the first half of 1998, when 727,578 cases were filed. The number of second quarter bankruptcies also eclipses the previous three-month record during the second quarter of 1998, when 373,460 new cases filed.

“The figures for the first half of this year are alarming, if not shocking,” said Samuel J. Gerdano, Executive Director of the American Bankruptcy Institute (ABI). “While we expected the second quarter to be high, given historic patterns, breaking the 400,000 mark sets a pace for a new bankruptcy record this year, shattering the 1998 record of 1.4 million total cases.”

Of the total number of bankruptcy filings for the 12-month period ending June 30, there were 972,659 chapter 7 filings, a 9.8 percent increase from 885,447 chapter 7 bankruptcies filed in the same period in 2000.

The next largest group of filings is chapter 13. These increased by 6 percent from 380,770 for the same period in 2000 to 403,418.

Of the total number of bankruptcy filings for the 3-month period ending June 30, chapter 7 filings increased by 30.3 percent from 225,024 to 293,228. Chapter 13 filings also saw an increase during the first quarter. They rose by 11 percent from 93,783 to 104,154.