Total Bankruptcies Decline Nearly 1%, But Filings Still Well Over a Million

WASHINGTON-The total number of bankruptcy filings fell slightly for the year ending June 30, 2004 for the first time since June 30, 2000. Bankruptcies for the 12-month period ending June 30 tallied 1,635,725, down 0.9% from a year ago when filings reached 1,650,279, according to the Administrative Office of the U.S. Courts. The office noted that filings remained well above the one million mark, a barrier that was broken in the year ending June 30, 1996. Non-business filings came to nearly 1.6 million, down 0.8% from the year before. Business filings were down 3.9% to 35,739. As is typical, a significant number of the total bankruptcies, 1,167,101 were Chapter 7 filings, where the debtors are relieved of their debts and certain assets. Chapter 13 filings, where debtors agree to pay back all or a portion of their debts in a three to five year period, fell 3.3% to 457,171. Chapter 11, which allows business to reorganize, rose 4.2% to 11,048. Legislation authorizing Chapter 12 family farm bankruptcy filings sunset Jan. 1, thus contributing to a 61% decline in these cases from 775 to 302 over the 12-month period ending June 30. General bankruptcy reform supporters have tried to tie the overall legislation to the Chapter 12 provision to push it through Congress, which has not worked. The bankruptcy reform legislation (H.R. 975) is in the Senate’s court now and most likely will stagnate there until the next legislative session. It has been hung up on an amendment that would prevent individuals convicted of performing violent acts against abortion clinics from filing for bankruptcy protection from the associated fines. For the quarter ending June 30, 2004, bankruptcy cases were down 4.3% to 421,110, from 440,257 the same quarter (Judiciary’s third quarter) last year. However, the filings were up from fiscal year 2004′s second quarter (Jan. 1, 2004-March 31, 2004), which saw 407,572 filings. The first quarter saw just 393,348 filings.