Bankruptcies in U.S. reach ANOTHER all time high in 1998! (03/99) In 1998, over 1.44 million bankruptcies were filed. This is the third year in a row that a record has been set according to the Administrative Office of the Courts. Interestingly, personal bankruptcies alone are responsible for the upward spiral. Since 1990, personal bankruptcies have increased 94.7 percent, while business bankruptcies have actually decreased by 31.6 percent. Chapter 7 is by far the most popular type of bankruptcy filing. Of the 1.44 million filed, about a million of these were under Chapter 7 (or 72.1%). Lenders point to these statistics as proof that the current bankruptcy laws are too permissive, and are currently urging Congress to reform the statutes.
Researchers find bankruptcy abuse is overstated (12/98) Bankruptcy professors at the Creighton University Law School determined that widespread abuse of the bankruptcy system is a myth. In a study for the American Bankruptcy Institute (ABI), the professors found that only 3 percent of debtors who file for bankruptcy under Chapter 7 could actually afford to repay some of their debts under a Chapter 13 plan. The ABI study contradicts at least two earlier studies. One such study, found that nearly 50 percent of bankruptcy filers could repay some of their debt. However, note that this study was performed on behalf of Visa and Mastercard. Another study by Ernst & Young suggested that 15% of Chapter 7 debtors could have repaid 64% of their unsecured debts. The Federal Government's Accounting Office found flaws with both earlier studies. The new results could have important implications for pending bankruptcy reform since the study seems to suggest that the system does not need a major overhaul.
US Bankruptcies rise to all time high (02/98) Federal Court officials announced that more bankruptcy petitions were filed in 1997 than ever before. The Administrative Office of the U.S. Courts reported that 1.35 million people filed for protection from creditors, up 19% from 1996. Last year 957,000 individuals and 32,000 businesses filed under Chapter 7. About 400,000 individuals and, and 11,000 business owners filed under Chapter 13. (Source: The Associated Press)