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July 2010

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This article is in the news archives --- for current news go to the Third Branch News.

 

BAPCPA Report Looks at Filers in Non-business Bankruptcies


Report: Bankruptcy Abuse Prevention and Consumer Protection Act Statistics (BAPCPA)

Statistics compiled by the Administrative Office (AO) show that total liabilities and assets rose among the 1.4 million individuals filing non-business bankruptcy petitions in 2009 when compared to 2008, and that over a quarter of Chapter 13 filers have filed for bankruptcy before.

These and other statistics regarding debtors who are individuals with primarily consumer debts seeking relief under Chapters 7, 11, and 13 have been compiled annually by the AO for Congress since October 2006, as required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Much of the data are self-reported by debtors when they submit forms, bankruptcy schedules, motions, agreements, and other filings to the court, and are not validated by either the court or the AO. Debtors also may fail to provide some or all of the data required by BAPCPA. Therefore, some caution should be used when analyzing the report’s data. The reports are available here.

Filings Under Chapters
During calendar year 2009, non-business filings by individuals increased 32 percent over 2008. Approximately 71 percent of these cases, up from 66 percent in 2008, were filed under Chapter 7. About 29 percent, down from 34 percent in 2008, were filed under Chapter 13. Consumer cases filed under Chapter 11 are relatively infrequent, making up less than 1 percent of the filings in 2009.

(click to enlarge)

Income and Expenses of Filers with Non-business Debt Calendar Year 2009

Assets and Liabilities
Consumer debtors seeking bankruptcy protection under Chapters 7, 11, or 13 during 2009 reported holding total assets in the aggregate amount of $200.3 billion and total liabilities in the aggregate amount of $325.6 billion.

In 2009, as consumer filings rose 32 percent, total assets self-reported by consumer debtors rose 34 percent over 2008; the total liabilities reported rose 53 percent in 2009 when compared to 2008. Filers in the U.S. District Court for the Central District of California reported the largest amount of total assets for any district at $24.7 billion, followed by the U.S. District Court for the Middle District of Florida at $9.7 billion and the U.S. District Court for the Eastern District of California at $8.5 billion.

In Chapter 7 cases, 81 percent of assets were categorized as real property, and 19 percent categorized as personal property. Real property assets in Chapter 11 and 13 cases were nearly the same, at 80 percent and 79 percent, respectively; and 20 percent and 21 percent, respectively, as personal property.

Chapter 7: A debtor’s assets are liquidated and the nonexempt proceeds are distributed to creditors

Chapter 11: Allows businesses and individuals to continue operating while they formulate plans to reorganize and repay their creditors

Chapter 13: Individuals with regular income and debts below a statutory threshold make installment payments to creditors pursuant to a court-confirmed plan

Overall, debtors categorized 95 percent of debts and obligations as dischargeable debt—debts for which the filer has no personal liability.

Income and Expenses
Income and expenses in consumer bankruptcy cases are also self-reported. Of the 1.32 million filers who submitted data, the median (the value separating the higher half from the lower half) current monthly income was $3,054 and the median average monthly income was $2,723. Median average expenses were $2,819.

The Northern District of California had the highest median current monthly income with $3,922 and the highest median average expenses with $3,925. The District of Puerto Rico had the lowest median current monthly income with $1,742 and the lowest median average expenses at $1,589.

Prior Filings Reported By Debtors
Twenty-eight percent of debtors filing under Chapter 13 (109,936 cases) reported that they had filed for bankruptcy during the previous eight years. The Western District of Tennessee had the largest number of cases in which debtors reported prior filings (7,063 cases).