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Bankruptcy Courts' Work Per Case Increases Significantly
The far-reaching changes in federal bankruptcy law that took effect
in October 2005 yielded a sharp decline in filings in 2006, but
preliminary information suggests that the work per case has increased
significantly for bankruptcy courts.
That increase, perhaps the least publicized impact of the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
(BAPCPA), is being felt in bankruptcy court clerks’ offices across the
“Although filings have started to rebound, no consensus
exists among bankruptcy courts as to when, or if, filings will return to
pre-BAPCPA levels,” Judge Julia Gibbons (6th Cir.), chair of the
Judicial Conference’s Committee on the Budget, told congressional
appropriations committees in March. “The number of filings alone,
however, should not be viewed as the sole indicator of overall workload.
BAPCPA created new docketing, noticing, and hearing requirements that
make addressing the petitions more complex and time-consuming,” she
Bankruptcy court officials agree. “Our staff is finding
that the amount of work per case has increased substantially,” said
Susan Thurston, the bankruptcy court clerk in Rhode Island.
George Prentice, clerk of court for the Western District
of Texas Bankruptcy Court, added: “The nature of our work shifted; it
did not go away.”
Survey information from 10 bankruptcy courts indicates
that user-entered docket entries per case have risen substantially since
the new law took effect. Likewise, the number of motions filed and the
number of judges’ orders show similar increases in those courts.
“More documents are filed in each case, reflecting the
fact that the new law carries more requirements, such as each petitioner
must certify that he or she has been through credit counseling. No such
document existed before BAPCPA,” Prentice said.
“The number of externally filed documents has increased,”
he said. “We quality control almost every document filed in a case,
particularly if it is user-entered. That has to be a daily function of
automated courts, because once something is filed it is instantly public
and transparent. It is incumbent on the clerk’s office to ensure the
docket offers an accurate picture of what is happening in a case.”
In Rhode Island, Thurston said, “Our workload is almost
as demanding and time-consuming for our small office as in past years.”
Why? The numbers from the District of Rhode Island Bankruptcy Court
- an 87 percent increase since BAPCPA in the ratio of motions to filings.
- a 104 percent increase in the ratio of orders to filings.
- a 68 percent increase in the ratio of docketed events to filings.
“There’s been a dramatic increase in the amount of work
per case, including the fact that we have many more pro se (filed
without a lawyer’s help) cases being filed. This increase directly
impacts our telephone workload, intake workload, and case-management
workload,” Thurston said.
The experience is not isolated. “More areas of the law
are unsettled. More hearings are required to determine the proper way to
interpret the new law,” Prentice explained. “And the law has resulted
in an increase in the percentage of more complicated Chapter 13 filings
compared to Chapter 7 cases.”
A Chapter 13 case, which involves reorganization and
partial repayment to creditors, can be active in a bankruptcy court for
up to five years. A Chapter 7 case, which involves liquidation of a
debtor’s assets, usually remains on a court’s docket for three to six
Enactment of BAPCPA came at a time when bankruptcy court
staffs were undergoing resizing. After reaching a peak of 5,334 on-board
employees in fiscal year 2002, employment in FY 2007 is 4,438—a 17
In this period of transition, Gibbons cited one constant
in her congressional testimony. “Of course, the root causes of
bankruptcy—job loss, business failure, medical bills, credit problems,
and divorce—were not affected by the legislation and are expected to
continue to be the primary drivers of filings,” she said.