WASHINGTON — As bankruptcy filers and their attorneys get a handle on the bankruptcy reforms that took effect last fall, the number of filings is beginning to creep upward.
The 12-month period ending June 30, 3006 saw 1,484,570 filings, well below the same period ending in 2005 at 1,637,254, according to the Administrative Office of the U.S. Courts. These particular stats will likely continue to decline over the next two quarters as the new quarters, with significantly fewer filings thus far, replace the old record-level filings, particularly after last October's larger-than-expected rush. Observers expect the number of filings to begin to ring truer after that.
A closer inspection of quarterly data shows the second quarter 2006 at 155,833 total bankruptcy filings, well above 116,771 from the first quarter. Still these figures are nothing compared to fourth quarter 2005 when 667,431 filings were made in anticipation of greater difficulties in qualifying for Chapter 7 where debts are erased.
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Chapter 7s still make up the bulk of filings. Of the 54,734 bankruptcy filings in June 2006, 32,826 were Chapter 7s and 21,491 were Chapter 13s. The bankruptcy reform legislation, effective Oct. 17, 2005, was created to stop people gaming the system and push more debtors into Chapter 13 repayment plans. The June figures represent a vast improvement over July of last year when 101,894 of the 133,707 filings were Chapter 7s.
Credit Union Times will provide a more detailed look at the latest bankruptcy statistics in the Sept. 13 issue.
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