By Diane Davis
Bankruptcy filings fell 0.7 percent in the 12-month period ending Dec. 31, 2017 compared to 2016, the latest figures from the Administrative Office of the U.S. Courts said Jan. 24.
Annual bankruptcy filings in 2017 totaled 789,020, compared with 794,960 in the previous year, the AOUSC said.
The percentage decline is the smallest for a 12-month period since bankruptcy filings reached a peak in 2010,but it is also the lowest number of bankruptcy filings for any calendar year since 2006, according to the AOUSC.
The statistics are “about what he expected,” and show that “bankruptcies have flattened out after years of decline,” Prof. Robert Lawless, of the University of Illinois College of Law, Champaign, Ill., told Bloomberg Law Jan. 24.
Lawless, the reporter for the American Bankruptcy Institute’s commission to modernize the consumer bankruptcy system, predicts that the bankruptcy filings will go back up over time, but not dramatically. The ABI commission expects to publish their final report in December.
“We’re seeing the effect of consumer borrowing two-to-three years ago,” and borrowing will be “going back up,” he said.
We went through a period where “borrowers were paying down their debt,” Lawless said.
“Household debt” is the driver of bankruptcy filings, Lawless said. The more debt consumers have, the more bankruptcy filings there are, he said.
The majority of bankruptcy filings involve non-business debts. During the 12-month period ending Dec. 31, 2017, non-business bankruptcy filings totaled 765,863, down from 770,846 in the previous year, the AOUSC said.
Business bankruptcy filings during the same 12-month period fell to 23,157, from 24,114 in 2016.
The number of bankruptcies filed by Bankruptcy Code chapter for the 12-month period ending Dec. 31, 2017, are as follows:
Chapter 13 allows individuals receiving regular income to obtain debt relief while retaining their property, but to do so, they must propose a plan that uses future income to repay all or a portion of their debts over a three- to five-year period.
Chapter 11 protects companies or individuals from creditors while they seek to reorganize their debt or liquidate under a plan that must be approved by the bankruptcy court.
Chapter 12 is designed to protect family farmers and family fishermen.
To contact the reporter on this story: Diane Davis in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jay Horowitz at email@example.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)