Estate Planning News

Total Bankruptcy Filings Down

August 27, 2004, Alexandria, Va. — The total number of bankruptcies filed in federal courts declined slightly in the 12-month period ending June 30, 2004, according to data released today by the Administrative Office of the U.S. Courts. It is the first annual decline since 2000. The total number of bankruptcy cases filed in this 12-month period totaled 1,635,725, down .9 percent from 1,650,279 for the same period in 2003.

While the total number of new filings during the quarter is the second-highest three-month total in history, it represented a 4.3 percent decline from the 440,257 new cases filed during the April-June period of 2003. This is the second consecutive quarter where total bankruptcy filings dropped from highs reached in 2003. Filings in the first quarter of 2004 also fell from a record high set in 2003. The total number of bankruptcies filed during the second quarter of FY 2004 (Jan. 1, 2004, to March 31, 2004) was 407,572, compared to the 421,110 filings in the third quarter (April 1, 2004, to June 30, 2004).

Non-business filings totaled 1,599,986, down .8 percent from the 1,613,097 cases filed during the 12-month period ending June 30, 2003.

“Consumer bankruptcy filings appear to have turned a corner,” said Samuel J. Gerdano, ABI Executive Director. “While bankruptcies are still high compared to four years ago, improving economic conditions and low interest rates are permitting more families to clean up their household balance sheets.”

In the 12-month period ending June 30, 2004, business filings dropped to 35,739, down 3.9 percent from 37,182. The number of public companies filing under chapter 11 has declined sharply this year, with only 51 new cases filed through Aug. 5, compared to 99 filed through this date last year, according to data released from Bankruptcydata.com. The size of the companies has also declined, resulting in fewer employees affected than in the peak filing years of 2001 and 2002.

Chapter 7 filings increased .1 percent from 1,165,993 in 2003 to 1,167,101 in the 12-month period ending June 30, 2004. Chapter 11 filings increased 4.2 percent from 10,602 in 2003 to 11,048 in 2004. Chapter 12 and 13 filings both decreased during the 12-month period ending June 30, 2004. Chapter 13 filings decreased 3.3 percent from 472,811 in 2003 to 457,171 in 2004. Chapter 12 filings decreased 61 percent from 775 in 2003 to 302 in 2004. Chapter 12 authorization expired early this year.

BUSINESS FILINGS for the 3-month period ending June 30, 2004, totaled 8,249, down 12 percent from the 9,331 bankruptcy business cases filed in the same period in 2003. NON-BUSINESS FILINGS for the 3-month period ending June 30, 2004, decreased 4.2 percent from 430,926 in 2003 to 412,861 in 2004.

The chapter* breakdown of BUSINESS filings for the 3-month period ending June 30, 2004, is: 5,225 chapter 7s, 1,779 chapter 11s, 10 chapter 12s and 1,195 chapter 13s.

The chapter breakdown of NON-BUSINESS filings for the 3-month period ending June 30, 2004, is: 302,803 chapter 7s, 214 chapter 11s and 109,843 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending June 30, 2004 (compared to the identical period in 2003):

Southern District of New York: 18.4%
District of Colorado: 13.3%
Middle District of Louisiana: 10.3%
Western District of Pennsylvania: 9.2%
Western District of Louisiana: 9.1%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending June 30, 2004 (compared to the identical period in 2003):

District of the Virgin Islands 29.8%
District of Columbia 16.8%
Central District of California 16.2%
District of Hawaii 15.8%
District of Northern Mariana Islands 11.1%

Contact our Plano estate planning attorney now.

	Did You Know?
	A "Family Limited Partnership" can be used to own and manage your property In a similar manner to a Trust, but allowing additional tax planning techniques to be employed. Family Limited Partnerships are typically used for those who have large estates and thus have a need for specialized estate planning in order to minimize federal and state estate/death/inheritance taxes as well as provide elements of asset protection.