Bankruptcy Filings Continue Record-Setting Pace; Will Legislation Ever Come?

WASHINGTON-Could the bankruptcy reform legislation stem the rising tide of bankruptcy filings or is the anticipation of its passage leading more people to file? Can anyone tell? According to the Administrative Office of the U.S. Courts, total bankruptcy filings in federal courts jumped 7.1% to more than 1.6 million in the 12-month period ending March 31, 2003. The previous record was 1,577,651 from the 12-month period at year-end 2002. The breakdown for the latest statistics includes 37,548 business bankruptcy petitions filed, down 5.8% from the period ending March 31, 2002, while non-business filings rose 7.4% from the same 12-month period a year ago to 1,573,720. This data also represents a record for personal filings in any 12-month period. The number of filings per judge has risen from 2,965 in March 1992, the last time judges were added, to 4,973 in March 2003. The bankruptcy reform bill (H.R. 975) currently before Congress would add 29 bankruptcy judges plus seven temporary judges in 22 judicial districts. An increase in bankruptcy judgeships has a second chance in an amendment offered by Senator Joseph Biden (D-Del.), supporter of the bankruptcy reform legislation, that would add 29 new, permanent federal bankruptcy judges, according to his office. The bill also converts two temporary judgeships to permanent status, authorizes seven additional temporary judgeships, and extends the terms of two other temporary judgeships. “The dramatic increase in bankruptcy filings in the past few years has created a serious need for additional judgeships, particularly in Delaware – far and away the nation’s most overworked bankruptcy court,” Biden said. “In these cases, timing is often critical, and without these additional judgeships, people could face significant and unnecessary delays.” Only Chapter 11 filings, or reorganizations, fell 6.6% from March 2002, when they sat at 11,477, to 10,722 in March 2003. Chapter 7 filings, or complete elimination of debts while exempting certain property from selling to pay off creditors, jumped 7.1% from 1,059,777 during the 12-month period ending March 2002 to 1,135,436 in the same period this year. Filings increased 7.2% for Chapter 13, where installment payments are made to creditors, and were up 62.5% for Chapter 12, which provides protection for family farmers. -