FIRST QUARTER BANKRUPTCY FILINGS ARE SECOND HIGHEST EVER

May 23, 2001

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The American Bankruptcy Institute reports that the number of bankruptcies filed during the first quarter of calendar year 2001 (Jan. 1 to March 31) rose 17.5 percent over the same period a year ago. Filings rose from 312,335 to 366,841, according to data released today by the Administrative Office of the U.S. Courts.

The figure is the highest ever for a first quarter and is surpassed in the number of quarterly filings only by the second quarter of 1998 (May 1 to June 30, 1998), when 373,460 new cases were filed.

The total bankruptcy filings for the quarter ending March 31 slipped slightly from a 10-year high when they reached 1,423,123 in March 1998, but the total remains well above the one-million mark. The total number of bankruptcy petitions filed rose a slight 0.5 percent in the 12-month period ending March 31, from 1,301,205 to 1,307,857.

The first quarter 2001 statistics show a significant increase in business filings and a modest increase in consumer filings. The statistics also show that the workload per judgeship has increased substantially from 3,007 filings to 4,037.

“Bankruptcy judges, as well as U.S. Trustees, are simply overworked and the system overtaxed,” said Prof. Jack F. Williams, the Robert M. Zinman Resident Scholar at ABI. “The recent sharp rise in chapter 7 filings may also suggest that debtors and debtors’ attorneys may be engaging in opportunistic behavior; that is, employing the chapter 7 filing option now before that option is largely foreclosed by the new bankruptcy bill.”

Of the total number of bankruptcy filings for the 3-month period ending March 31, chapter 7 filings increased by 21 percent from 215,454 to 260,692.
Chapter 13 filings also saw an increase during the first quarter. They rose by 10 percent from 94,007 to 103,168.