Consumer Bankruptcy Filings Down 10 Percent Through Nine Months of 2011
Contact: John Hartgen
703-894-5935
[email protected]
CONSUMER BANKRUPTCY FILINGS DOWN 10 PERCENT THROUGH NINE MONTHS OF 2011
October 4, 2011, Alexandria, Va. — U.S.
consumer bankruptcy filings totaled 1,044,722 nationwide during the
first nine months of 2011 (Jan. 1-Sept. 30), a 10 percent decrease from
the 1,165,172 total consumer filings during the same period a year ago,
according to the American Bankruptcy Institute (ABI), relying on data
from the National Bankruptcy Research Center (NBKRC). September consumer
bankruptcies decreased 17 percent nationwide from September 2010 as the
data showed that the overall consumer filing total for September reached
108,517 down from the 130,329 consumer filings recorded in September
2010.
“The trend of declining filings has been consistent with consumers
continuing to reign in their spending, household debt, and an overall
pull back in consumer credit,” said ABI Executive Director
Samuel J. Gerdano. “Total consumer filings for
2011 will be less than 2010.”
The September 2011 filings also represented a 4 percent decrease from
the August 2011 consumer bankruptcy total of 113,432 filings, a slight
change that could be the result of one less day in the month. The
percentage of chapter 13 filings for September was 30 percent, a one
percent increase from August.
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ABI is the largest multi-disciplinary, nonpartisan organization
dedicated to research and education on matters related to insolvency.
ABI was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The ABI membership includes more than
13,000 attorneys, accountants, bankers, judges, professors, lenders,
turnaround specialists and other bankruptcy professionals, providing a
forum for the exchange of ideas and information. For additional
information on ABI, visit www.abiworld.org. For additional
conference information, visit http://www.abiworld.org/conferences.html.
NBKRC is an online research center that offers subscribers access to
up-to-date research and statistics on bankruptcy filings. The database
contains complete information dating back to 1995. For more information
on NBKRC, please visit http://www.nbkrc.com.
*Definitions from Bankruptcy Overview: Issues, Law and Policy, by the
American Bankruptcy Institute.
Chapter 7 of the Bankruptcy Code is available to both individual and
business debtors. Its purpose is to achieve a fair distribution to
creditors of the debtor’s available non-exempt property.
Unsecured debts not reaffirmed are discharged, providing a fresh
financial start.
Chapter 11 of the Bankruptcy Code is available for both business and
consumer debtors. Its purpose is to rehabilitate a business as a going
concern or reorganize an individual’s finances through a
court-approved reorganization plan.
Chapter 12 of the Bankruptcy Code is designed to give special debt
relief to a family farmer with regular income from farming.
Chapter 13 of the Bankruptcy Code is available for an individual with
regular income whose debts do not exceed specific amounts; it is
typically used to budget some of the debtor’s future earnings
under a plan through which unsecured creditors are paid in whole or in
part.
Termination of Pension Plans by Bankrupt Companies Is Too Easy Under the Current Law According to Latest ABI Poll
Contact: John Hartgen
703-894-5935
[email protected]
TERMINATION OF PENSION PLANS BY BANKRUPT COMPANIES IS TOO EASY UNDER THE CURRENT LAW, ACCORDING TO LATEST ABI POLL
October 12, 2011, Alexandria, Va.— A majority
of respondents in a recent ABI
Quick Poll believe that it is too easy under current law for
bankrupt companies to terminate pension plans. Fifty-four percent agreed
(37 percent “strongly agreed” and 17 percent “somewhat
agreed”) that it is too easy under the Bankruptcy Code for
companies to terminate pension plans.
In 1984 the Supreme Court in NLRB v. Bildisco, 465 U.S. 513 (1984),
confirmed that collective bargaining agreements, which include pension
plans, can be rejected under §365 of the Bankruptcy Code. The Court
determined that the debtor in possession must satisfy something more
than the often-used “business judgment” test, but did not
require the stricter standard that the labor unions were seeking. In
response to Bildisco, Congress enacted §1113 of the Bankruptcy
Code. Section 1113 removes collective bargaining agreements from
§365 and instead provides specific requirements a debtor must
fulfill in order to reject a collective bargaining agreement in
bankruptcy. The recent ABI poll suggests that Congress may not have gone
far enough to protect collective bargaining agreements from rejection in
bankruptcy. In a related 2006
Quick Poll, 63 percent of respondents agreed that the practice of
corporate debtors shedding their defined benefit pension plans onto the
Pension Benefit Guaranty Corp. (PBGC) is an abuse of the bankruptcy
system.
Thirty-eight respondents to the current poll disagreed (30 percent
“strongly disagreed” and 8 percent “somewhat
disagreed”) that it is too easy under the current law for bankrupt
companies to terminate pension plans. Five percent “did not know
or had no opinion” on the question.
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and
the public are invited to respond to a question on a timely bankruptcy
or insolvency issue. Visit http://www.abiworld.net/quickpoll/
to access the results of previous ABI Quick Polls.
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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes over 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.