BankruptcyProf Blog

January Filings Down Again

There were 89,037 bankruptcy petitions filed in January, 2009.  This compares to 95,403 in December and 91,355 in November of 2008.   I don't think there is much doubt that a lot of people are waiting to see what form the home mortgage modification legislation will take.  It looks like a person filing chapter 7 now will be able to convert their case to chapter 13 later if they can modify their mortgage.  The problem is if they get a discharge in the chapter 7, they cannot get another discharge in a chapter 13 for a while.  So unless there is some other important reason to file now, why not wait for a few weeks anyway.   

Bankruptcy Filings Up Again? I Don't Think So

The business section of the LA Times today had a little article entitled, "Bankruptcy filings by consumers soar."  The sub-title is "More than 1 million, a 33% rise, sought court protection in 2008."  There was of course a 33% increase from 2007 to 2008 - 1.06 million compared to about 801,000 - but filings in December, 2008 went down compared to November on a daily basis which was down compared to October, 2008.  Total filings in 2008 are still significantly less than any pre-BAPCPA year going back to 1994.  What is especially galling to me is the statement in the article that total filings in 2006 was 573,000 "the lowest level since 1998."  That is flat out wrong.  Filings in 1998 were almost 1.4 million - the 4th quarter of 1998 was 353,000 alone.  1997 was 1.4 million; 1996 was 1.25 million.  But bankruptcy filings soar?  I don't think so.      

Total filings in December, 2008 were 95,403 compared to November of 91,355 (for only 18 business days) and 108,595 in October.  I am certain that the fall off is due to the number of people waiting to see if there is a new law in 2009 which will permit homeowners to re-write their home mortgage.  It appears that that will happen and the proposed bill that I saw applied only to cases filed after the law is enacted.  I have personally told several persons to wait since they will accomplish more by filing in February or March than today.  Of course it is only speculation that Congress will pass anything and heaven only knows what it will say but that appears to be the direction.  So persons who have the luxury of waiting are waiting. 

Bankruptcy Filing Statistics for the Central District of California

It looks like we will have about 65,000 filings (about 3,200 for each of the 20 judges here) in the calendar year 2008 compared to 34,000 last year.  You can access the statistics here.  What surprises me is that the 2008 filings are higher than 2004.  As I have posted earlier, total filings in the country are still about one-third less than total filings in 2004. 

There were 724 chapter 11 filings in the whole district through early December, 2008.  It seems that Delaware gets that many every week and for seven judges. 

There was a funny comment on the Credit Slips blog.  Someone asked how many filings were expected for 2009 and someone answered "about 1.2 million unless Congress permits adjustment of home mortgages, then about 2.5 million." 

Bankruptcy Filing Statistics for November

Total bankruptcy filings in November reached 91,355 compared to 108,595 in October.  November had only 18 business days so the decrease is not really there.  On a daily basis, the filings were slightly higher in November.  Filings for 2008 will reach about 1.1 million.  This is still well below every year pre-BAPCPA going back to 1995.  For example, 2004 filings were 1,597,000; 2003 were 1,660,000; 2002, 1,577,000; 2001, 1,492,000.  In other words, filings in 2008, a disaster of a year financially if there ever were one, are 31% less than 2004, 2003 and 2002 each. 

I remain convinced that filings are way down because attorneys fees are way up and the hassle, i.e., the credit counseling, the paycheck stubs for 60 days, the means test, turnover of tax returns, etc. chases prospective filers away.  The credit card companies have gotten what they thought they wanted.  Pre-BAPCPA, I'll bet more people filed and went out and started using credit cards again and now they are just hiding from the collectors.  No new cards, no new ridculous terms.         

Bankruptcy Filings Central District of California

 The Central District led the nation with 47,140 filings for the 12-month period ending June 30, 2008, up 85.9% from 25,353 filings in the previous period.

 Central District outpaced the national average percentage increase in filings by 57% (85.9% vs. 28.9%) over the same period.

 Current Filings:

                         Ch 7    Ch 11 Ch 13     Total
Jan – Aug 2008   30,107   557   9,655    40,319
Jan – Aug 2007   15,816   212   4,800    20,828

 Overall, filings through August are up 93.6% district-wide when compared to the same period last year.

 The Court is averaging 1,397 filings per week over the last ten weeks, a 108.3% increase over the 671 filings averaged over the same period in 2007.

 Projected 2008 Filings:

Projection Method Projection Filings
Seasonal Average (2000-2004, 2006-2007) 59,102
2 Year Straight-line (2007-2008) 64,903
1 Year Straight-line (2008) 69,579

 The Court is projecting upwards of 69,579 filings this year, the highest pre-BAPCPA annual total since 2003, when the Court had 75,686 filings.

 In 2008, Chapter 13 filings are approximately 24% of the Courts filings, compared to 9% pre-BAPCPA.

 Pro se filings comprise slightly more than of 23% of the Courts filings in 2008, compared to the national average of 6%.

Bankruptcy Filings Increase Again

Total Bankruptcy filings for October was 108,595 or an 8% increase over last month and 33% increase over October, 2007.  At that rate, total filings for the 4th Quarter will be about 326,000 or an annual rate of 1.3 million.  That amount would exceed the total in 1999 and 2000.  2001 through 2004 exceeded 1.5 million each year (1,492,000 in 2001) and of course the bump in 2005 of 2,078,000. 

Bankruptcy Filings Increase Slightly in September

September saw 96,049 bankruptcy petitions, up from 93,987 in August and down a little from 96,385 for July, 2008.  That is 286,421 for the quarter compared to 272,000 in the second quarter and 242,000 in the first quarter of 2008.  The third quarter of 2007 had about 219,000 filings.  The last pre-BAPCPA quarter that was lower than the third quarter 2008 was the first quarter 1996 with 266,000 filings.  Filings broke 400,000 for the first time in the second quarter of 2001. 

August Bankruptcy Filings

Total bankruptcy filings for August were 93,987 or 4,476 per day.  This compares to 96,385 for July or 4,381 per day.  At this rate, the third quarter will be about 285,000 compared to 272,000 in the second quarter and 240,000 in the first quarter.   If the 4th quarter is roughly 300,000, the total for 2008 will be about 1.1 million.  2004 was 1.6 million; 2003 was 1.7 million; 2002 was 1.6 million.  These were years when home values were rising dramatically and many individuals could not file anything because there was too much equity in their home.  We are back to the times when debtors call me and tell me they are ready to walk from the home because there is no equity.  The point of this is that bankruptcy filings are still drastically down in my opinion. 

Filings By Quarter per U.S. Courts website. 

PERIOD	FILINGS	PERIOD	FILINGS	PERIOD	FILINGS
DEC. 31, 2007	226,413	DEC. 31, 2003	393,348	DEC. 31, 1999	318,634
SEPT. 30, 2007	218,909	SEPT. 30, 2003	412,989	SEPT. 30, 1999	323,550
JUN. 30, 2007	210,449	JUN. 30, 2003	440,257	JUN. 30, 1999	345,956
MAR. 31, 2007	193,641	MAR. 31, 2003	412,968	MAR. 31, 1999	330,784
DEC. 31, 2006	177,599	DEC. 31, 2002	395,129	DEC. 31, 1998	353,108
SEPT. 30, 2006	171,146	SEPT. 30, 2002	401,306	SEPT. 30, 1998	361,205
JUN. 30, 2006	155,833	JUN. 30, 2002	400,686	JUN. 30, 1998	373,460
MAR. 31, 2006	116,771	MAR. 31, 2002	379,012	MAR. 31, 1998	354,118
DEC. 31, 2005	667,431	DEC. 31, 2001	364,921	DEC. 31, 1997	347,685
SEPT. 30, 2005	542,002	SEPT. 30, 2001	359,518	SEPT. 30, 1997	353,515
JUN. 30, 2005	467,333	JUN. 30, 2001	400,394	JUN. 30, 1997	367,168
MAR.31, 2005	401,149	MAR. 31, 2001	366,841	MAR. 31, 1997	335,073
DEC. 31, 2004	371,668	DEC. 31, 2000	310,169	DEC. 31, 1996	311,131
SEPT. 30, 2004	396,438	SEPT. 30, 2000	308,718	SEPT. 30, 1996	303,309
JUN. 30, 2004	421,110	JUN. 30, 2000	321,729	JUN. 30, 1996	297,162
MAR. 31, 2004	407,572	MAR. 31, 2000	312,335	MAR. 31, 1996	266,149
				DEC. 31, 1995	244,494

71 Public Companies Have Filed Chapter 11 so Far This Year

Year	No. of filings	Assets (billions)
2003	172	$98.3
2004	92	$47.7
2005	86	$133.8
2006	66	$22.3
2007	78	$70.5
2008*	71	$75.8
* -- Year to date; Sources: BankruptcyData.com, New Generation Research

Bankruptcy Filings Increase Again in July, 2008

Total bankruptcy filings for July, 2008 were 96,355, up from 69,059 a year ago, a 39% increase.  Is that a lot?  At that rate, the third quarter of 2008 would total 288,000 filings.  Every quarter since the 2nd quarter of 1996 (other than post-BAPCPA quarters) has exceeded that amount.   Total filings for the 2nd quarter 2008 was 272,000 and 240,000 for the 1st quarter.

I remain convinced that the hurdles Congress threw in front of debtors have been wildly successful.  The hurdles are the increased cost in terms of attorneys fees, the credit counseling, and the means test FORM (not the means test itself).    

GAO Report, "Bankruptcy Reform: Dollar Costs Associated With the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005"

The "United States Government Accountability Office" published this report on July 28, 2008 examining the costs of implementing BAPCPA.  Of course, US Trustee costs went up, supposedly some $72 million, court costs went up some $42 million, individual trustee costs went up, and attorneys fees went up some 51%  With filings down, income to the government has gone down.  I shouldn't say "supposedly" I guess, since a lot of effort apparently went into figuring out these additional costs.  I think a lot of the "increased costs" is done by employees who were already there although the UST says it hired 127 new staff to do the extra BAPCPA required work. 

This was my complaint all along with the means test.  The structure was already there to weed out the bad filers.  Sections 727, 523 and 707(b).  The credit card industry did not want to bother with protecting itself by filing complaints and motions.  It wanted a government apparatus set up to do the work for it.

There was no comment, by the way, about the cost of preparing the 53 page report.    

Chapter 13 Statistics

Statistics nuts will love this spreadsheet - 201 rows down and about 60 columns across.  Collections and distributions by trustee, by category of distribution.  $5.1 billion in debtor payments for the fiscal year 2007.  $2.8 billion went to secured creditors, $300 million to priority creditors, $1.3 billion to unsecured creditors, and $400 million to debtor's counsel.  It looks like $250 million went to the trustees but I'm not sure if I'm reading it right.  281,000 new cases were filed during the period.      

You can find the report here. 

2007 BAPCPA Statistics

80 pages of statistics and I didn't bring my advil this morning.  The report prepared by something called "Office of Judges Programs, Statistics Division, Administrative Office of the United States Courts" can be found here.    Five attorneys were sanctioned for abusive filings during the year - two of those in the Eastern District of California. 55,000 chapter 13 "consumer cases" were "terminated" in 2007.  1,627 were plans that were completed and 53,007 were not, just cases that were dismissed.  That statistic is a little misleading.  In California, something like 50% of the chapter 13s filed lately are by pro pers who never file anything but the emergency petition.  They are simply buying themselves a few weeks.

May Bankruptcy Filings - Hot Off the Press

Professor Bob Lawless has posted his update on bankruptcy filings through May, 2008.  There were 89,560 filings in May compared to 93,096 in April, 2008.  The Credit Slips posting is here. 

Central District of California Filing Statistics

According to the Clerk's Office here in Los Angeles, total filings for the January - April, 2008 period were 16,824, up from 9,393 or 79% for the same four months a year ago.  This is 5.1% of the total filings in the United States for the period.  As we have 20 judges in the Central District, this is 210 new cases per judge per month, this year at least.

April 2008 Filings

April 2008 saw 93,096 petitions filed in the United States.  This up from 90,288 in March, 2008 and up from 67,787 in April of 2007.  The total for the first four months of 08 is 333,051 compared to 254,799 for the four months in 2007 or a 31% increase.  According to Bob Lawless on Credit Slips, the April filings are actually sightly down from March because there was one more "filing day" in April. 

Looking at just the past three months, Feb - April, the total of 272,772 is still lower than any quarter since March, 1996. 

First Quarter Bankruptcy Filings Up Again

Total bankruptcy filings for the first quarter of 2008 were 240,000 - 6% more than the previous quarter and 24% more than the same quarter in 2007. 

Total filings by month since January 2006 can be found on Credit Slips posted by Bob Lawless. 

Bankruptcy Filings Increase

According to the latest statistics, 226,000 bankruptcy petitions were filed in the October-December, 2007 quarter throughout the country.  That is about 4% more than the previous quarter and about 27% more than the same quater last year.  The statistics are laid out nicely on the U.S.Courts website.

Looking though at the quarterly filings from September, 1996 until BAPCPA, total quarterly filings have not been under 300,000.  Total quarterly filings have generally exceeded 400,000 since June 2002 until BAPCPA.  Perhaps the effort to prevent, i.e., discourage, filing is working better than we think.   

Bankruptcy Statistics

Professor Joe Hodnicki has a nice post on bankruptcy statistics for 2007.

Bankruptcy Filings Up

For the third quarter ended September 30, 2007, bankruptcy filings increased 4% over the previous quarter and 28% over the same quarter a year ago. 

You can get all the facts and figures on the court website.