Bankruptcy Trend Reverses
March 8, 2000
As a congressional conference committee considers legislation that would reform federal bankruptcy laws, American Bankruptcy Institute figures show that after four years of record increases, personal and business bankruptcies abruptly reverses that trend and declined last year.
- The number of individual and business bankruptcy filings decreased 8.5 percent in 1999.
- Filings in the fourth quarter fell even further -- down 10 percent to just under 319,000.
- In total, there were 1.3 million bankruptcy filings last year -- down from 1.4 million in 1998.
- Personal bankruptcies declined 8.3 percent from 1998, while business filings plunged 15 percent.
Having passed both the House and Senate, bills which would reform the bankruptcy laws are awaiting reconciliation by a conference committee. Under the bills, people judged able to pay what they own could be disqualified from filing under Chapter 7 -- which allows most unsecured debt, such as credit card bills, to be wiped out -- and put into Chapter 13, which requires repayment of those debts.
Source: Reuters, "Personal, Business Bankruptcies Drop," USA Today, March 7, 2000.
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