2006 Fiscal Year Bankruptcy Statistics Released
www.uscourt.gov recently released bankruptcy filing statistics for the 2006 fiscal year. (October 1, 2005 – September 30, 2006) The total number of bankruptcy filings for the 2006 fiscal year (1,112,542) was the lowest amount since 1996. Chapter 7 bankruptcies accounted for 75 percent of all petitions filed in the 2006 fiscal year.
The numbers for this time period are deceptive, because over 50% of all bankruptcies filed during this period were filed in the first 16 days of the fiscal period. This is a result of a rush to file cases before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BACPA) that went into effect October 17th, 2005.
The drop-off in filings after the law change was largely expected by the bankruptcy legal community, but many bankruptcy attorneys did not expect the decrease in filings to last for so long. As the public becomes more educated about the new bankruptcy laws, I expect bankruptcy filings to gradually increase, especially with the large amount of homes currently in foreclosure nationwide. Chapter 13 bankruptcies will become increasingly popular as more homeowners need to seek bankruptcy protection to stop a foreclosure on their home.