U.S. consumer bankruptcy filings increased 17.3 percent nationwide in August from the previous month, according to the American Bankruptcy Institute (ABI). Relying on data provided by the National Bankruptcy Research Center (NBKRC), overall consumer filings totaled 74,607 in August, up from the 63,600 filings in July. The figure was also up 31.2 percent from August 2006. Chapter 13 filings constituted 39.6 percent of all consumer cases in August, down slightly from last month.
“The uptick in August bankruptcies continues the trend we’ve seen all year,” observed ABI Executive Director Samuel J. Gerdano. “Families facing heavy household debts are increasingly turning to bankruptcy as a short-term fix.”
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 11,500 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.
NBKRC is an online research center that offers subscribers access to up-to-date research and statistics on bankruptcy filings. The database contains complete information dating back to 1995. For more information on NBKRC, please visit http://www.nbkrc.com.
*Definitions from Bankruptcy Overview: Issues, Law and Policy, by the American Bankruptcy Institute.
Chapter 7 of the Bankruptcy Code is available to both individual and business debtors. Its purpose is to achieve a fair distribution to creditors of the debtor’s available non-exempt property. Unsecured debts not reaffirmed are discharged, providing a fresh financial start.
Chapter 11 of the Bankruptcy Code is available for both business and consumer debtors. Its purpose is to rehabilitate a business as a going concern or reorganize an individual’s finances through a court-approved reorganization plan.
Chapter 12 of the Bankruptcy Code is designed to give special debt relief to a family farmer with regular income from farming.
Chapter 13 of the Bankruptcy Code is available for an individual with regular income whose debts do not exceed specific amounts; it is typically used to budget some of the debtor’s future earnings under a plan through which unsecured creditors are paid in whole or in part.