MARCH 2004

Final Bankruptcy Totals for 2003

As creditors already know, bankruptcy courts in the United States experienced another record-setting year in 2003. According to data just released from the Administrative Office of the U.S. Courts, personal bankruptcies filed during the calendar year totaled 1,625,208 eclipsing the previous record (set in 2003) by over 85,000 petitions. To put this number in perspective, personal bankruptcies have more than doubled since 1994. However, the filing frenzy seems to have peaked for this economic cycle. The 12-month total through December 31, 2003 was actually slightly lower (by 605 petitions) than the total for the 12 months ending September 30, 2003. Filings for the fourth quarter of 2003 were down 0.5% from the same quarter one year earlier.

For all of 2003, Chapter 7 bankruptcies (in which individuals are allowed to keep certain exempt property while any remaining assets are sold to pay off unsecured creditors) continued to make up about 71% of all filings. This proportion has remained unchanged for over a decade, despite legislative efforts (most notably in 1994) to steer borrowers with significant repayment capacity into Chapter 13 repayment plans. Since 1997, legislation that would impose a "means test" for Chapter 7 eligibility has been pending in Congress. The most recent version passed the House of Representatives on January 28 2004 by a 265-99 vote. It remains stalled in the Senate.

Out of 91 bankruptcy judicial districts in the U.S. and Puerto Rico, all but 11 experienced year-over-year increases in filing volume during 2003. The table below provides detailed statistics on the number of filings and growth rates by judicial district. The accompanying chart displays the year-over-year rate of change in personal bankruptcy filings, by quarter.

See Larger Chart