Total Bankruptcy Filings At Mid-Year

The latest figures prepared by the Administrative Office of the U.S. Courts show that the overall decrease in overall filings was not particularly consistent throughout the country.

Of the 12 circuits throughout the country, only five posted fewer filings for the 12-month period ending June 30, 2004 than over the same period for 2003, while seven circuits actually posted increases. The greatest decreases were seen in the Circuit for the District of Columbia, which fell by 16.8% and the Ninth Circuit, which dropped by 6.6% or 18,800 overall filings. The greatest increase in the number of filings for the 12-month period ending June 30, 2004 was seen in the Second Circuit, which increased 5.3% or 4751 filings.

Non-Business Filings

The vast majority of all filings were non-business. For the 12-month period ending June 30, 2004, there were 1,599,986 filings, 0.8 fewer than last year's total of 1,613,097.By comparison, for the 12-month period ending June 30, 2003, there was a 10% increase in non-business filings over the same period in 2002. Broken down by chapter, the 12-month totals for non-Business filings were:

• Chapter 7: 1,146,761 (June 30, 2004); 1,144,658 (June 30, 2003); 1,030,372 (June 30, 2002).
• Chapter 11: 935 (June 30, 2004; 966 (June 30, 2003); 894 (June 30, 2002).
• Chapter 13: 452,286 (June 30, 2004); 467,466 (June 30, 2003); 434,835 (June 30, 2002).

Business Filings

For the 12-month period ending June 30, 2004 there was a total of 35,739 business cases filed, compared with 37,1825 for the previous 12-month period, a decrease of 3.9%. Of primary significance to business bankruptcy practitioners, however, is that the number of Chapter 11 business filings has increased 5% from the 12-month period ending June 30, 2003 to the same period for the present year, growing from 9636 to 10,113.Surprisingly, however, the number of Chapter 11 business filings for the 3-month period ending June 30, 2004 is down by a whopping 24.2% over the same period in 2003, dropping from 2348 filings in 2003 to 1,779 filings in 2004.Chapter 7 business filings over this same three-month period, on the other hand, are only down by 2.9%.

The total business filings made during the 12-month periods ending June 30 occurred in the following four categories:

• Chapter 7:20,340 (2004); 21,335 (2003); 22,858 (2002).
• Chapter 11:10,113 (2004); 9,636 (2003); 10,507 (2002).
• Chapter 12:302 (2004); 775 (2003); 367 (2002).
• Chapter 13:4,885 (2004); 5,345 (2003); 5,396 (2002).

Following the Activity

Continuing a pattern, which has been in place for a number of years, California remains the most active state for bankruptcy practitioners, despite decreasing by nearly 11% for the 12-month period ending June 30, 2004 from the same 12-month period ending June 30, 2003.

Usually, the 12-month totals show that California has not only more filings than every other state, but also every other circuit other than the Ninth Circuit, in which it is located. For the 12-month period ending June 30, 2004, however, the Fourth, Fifth, Sixth, Seventh and Eleventh Circuits all had considerably more filing than California (see Table 1).

The Central District of California was the most active in the nation and recorded 68,419 filings, a significant 16.1% decrease from the same 12-month period in 2003. In fact, among the 25 most active districts, 11 showed decreases when the 12-month totals of 2004 are compared with those in 2003 (see Table 4).

Most of the 10 of the districts usually among the most active for bankruptcy filings stayed in the top ten when the current 12-month totals for 2004 are compared with those in 2003. The significant changes in this regard were Eastern Michigan, which moved up to fifth place from sixth in 2003, and Northern Texas, which jumped to 10th place from 15th in 2003.Within the top 20, the Southern District of Florida and the Eastern District of California both posted notable decreases over the previous year's totals, dropping 9.5% and 6.0%, respectively, from June 30, 2003 to the same period in 2004. For the 12-month period ending June 30, 2004, the largest increase in filings in the top ten occurred in the Southern and Northern Districts of Ohio, which increased 6.8% and 6.2%, respectively.

On a state-by-state comparison, 11 states among the top 20 increased over the 12-month period ending June 30, 2004, and with the exception of Louisiana, all 20 most active states in 2004 were in the top 20 in 2003. There were many states that switched positions (see Table 3). The most notable changes were seen in Texas (moved from the third in 2003 to the second most active state in 2004), Florida (dropped from second in 2003 to third in 2004), Illinois, Ohio and New York. For the 12-month period ending June 30, 2004, the largest increase in filings among the states in the top ten occurred in New York and Ohio, which increased 6.9% and 6.4%, respectively.

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The number of total bankruptcy petitions filed for the 12-month period ending June 30, 2004 has decreased for the first time since 2000 over this time period, according to the latest figures prepared by the Administrative Office of the U.S. Courts. For the 12-month period ending June 30, 2004, there were 1,635,725 filings, or 14,554 fewer than the 12-month period ending June 30, 2003 when 1,650,279 petitions were filed, the record high for this time period. Although this overall decrease is fairly modest, only 0.9%, business bankruptcy practitioners should take note that business filing are off by 3.9% since mid-year 2003 and nearly 9% since mid-year 2002.

For the 3-month period ending June 30, 2004, there was a total of 421,110 bankruptcy petitions filed, the second highest total for any quarter in history and the second consecutive quarter that filings have increased. The all-time record for filings in a single quarter was set in the 3-month period ending June 30, 2003 when 440,257 filing were reported. This decrease of 4.3% from the second quarter of 2003 also follows a 1.3% decrease from the first quarter of 2003 to the first quarter of this year.

While practitioners specializing in business bankruptcy are reporting healthy workloads, the actual numbers of business filings are at their lowest point in over 10 years. In fact, since 1999, business filings for the 12-month period ending June 30 have not cracked the 40,000 filing threshold even a single time, while by comparison, business filings for this time period regularly exceeded 50,000 filings as recently as 1998.Going back slightly further, it will be seen that business filings have actually exceeded 60,000 as recently as June 30, 1993 when 66,428 business filings were reported. It should be interesting to see whether business filings are affected by any rise in interest rates that may come about in the months following the November elections.

The latest figures prepared by the Administrative Office of the U.S. Courts show that the overall decrease in overall filings was not particularly consistent throughout the country.

Of the 12 circuits throughout the country, only five posted fewer filings for the 12-month period ending June 30, 2004 than over the same period for 2003, while seven circuits actually posted increases. The greatest decreases were seen in the Circuit for the District of Columbia, which fell by 16.8% and the Ninth Circuit, which dropped by 6.6% or 18,800 overall filings. The greatest increase in the number of filings for the 12-month period ending June 30, 2004 was seen in the Second Circuit, which increased 5.3% or 4751 filings.

Non-Business Filings

The vast majority of all filings were non-business. For the 12-month period ending June 30, 2004, there were 1,599,986 filings, 0.8 fewer than last year's total of 1,613,097.By comparison, for the 12-month period ending June 30, 2003, there was a 10% increase in non-business filings over the same period in 2002. Broken down by chapter, the 12-month totals for non-Business filings were:

• Chapter 7: 1,146,761 (June 30, 2004); 1,144,658 (June 30, 2003); 1,030,372 (June 30, 2002).
• Chapter 11: 935 (June 30, 2004; 966 (June 30, 2003); 894 (June 30, 2002).
• Chapter 13: 452,286 (June 30, 2004); 467,466 (June 30, 2003); 434,835 (June 30, 2002).

Business Filings

For the 12-month period ending June 30, 2004 there was a total of 35,739 business cases filed, compared with 37,1825 for the previous 12-month period, a decrease of 3.9%. Of primary significance to business bankruptcy practitioners, however, is that the number of Chapter 11 business filings has increased 5% from the 12-month period ending June 30, 2003 to the same period for the present year, growing from 9636 to 10,113.Surprisingly, however, the number of Chapter 11 business filings for the 3-month period ending June 30, 2004 is down by a whopping 24.2% over the same period in 2003, dropping from 2348 filings in 2003 to 1,779 filings in 2004.Chapter 7 business filings over this same three-month period, on the other hand, are only down by 2.9%.

The total business filings made during the 12-month periods ending June 30 occurred in the following four categories:

• Chapter 7:20,340 (2004); 21,335 (2003); 22,858 (2002).
• Chapter 11:10,113 (2004); 9,636 (2003); 10,507 (2002).
• Chapter 12:302 (2004); 775 (2003); 367 (2002).
• Chapter 13:4,885 (2004); 5,345 (2003); 5,396 (2002).

Following the Activity

Continuing a pattern, which has been in place for a number of years, California remains the most active state for bankruptcy practitioners, despite decreasing by nearly 11% for the 12-month period ending June 30, 2004 from the same 12-month period ending June 30, 2003.

Usually, the 12-month totals show that California has not only more filings than every other state, but also every other circuit other than the Ninth Circuit, in which it is located. For the 12-month period ending June 30, 2004, however, the Fourth, Fifth, Sixth, Seventh and Eleventh Circuits all had considerably more filing than California (see Table 1).

The Central District of California was the most active in the nation and recorded 68,419 filings, a significant 16.1% decrease from the same 12-month period in 2003. In fact, among the 25 most active districts, 11 showed decreases when the 12-month totals of 2004 are compared with those in 2003 (see Table 4).

Most of the 10 of the districts usually among the most active for bankruptcy filings stayed in the top ten when the current 12-month totals for 2004 are compared with those in 2003. The significant changes in this regard were Eastern Michigan, which moved up to fifth place from sixth in 2003, and Northern Texas, which jumped to 10th place from 15th in 2003.Within the top 20, the Southern District of Florida and the Eastern District of California both posted notable decreases over the previous year's totals, dropping 9.5% and 6.0%, respectively, from June 30, 2003 to the same period in 2004. For the 12-month period ending June 30, 2004, the largest increase in filings in the top ten occurred in the Southern and Northern Districts of Ohio, which increased 6.8% and 6.2%, respectively.

On a state-by-state comparison, 11 states among the top 20 increased over the 12-month period ending June 30, 2004, and with the exception of Louisiana, all 20 most active states in 2004 were in the top 20 in 2003. There were many states that switched positions (see Table 3). The most notable changes were seen in Texas (moved from the third in 2003 to the second most active state in 2004), Florida (dropped from second in 2003 to third in 2004), Illinois, Ohio and New York. For the 12-month period ending June 30, 2004, the largest increase in filings among the states in the top ten occurred in New York and Ohio, which increased 6.9% and 6.4%, respectively.

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