U.S. Bankruptcy Courts - Judicial Business 2016

Consumer (i.e., largely nonbusiness) petitions, which accounted for approximately 97 percent of all petitions, dropped 6 percent to 781,123. Business petitions, which amounted to 3 percent of all petitions, fell 2 percent to 24,457.

Bankruptcy petitions may be filed under one of six chapters of the Bankruptcy Code. Most consumer petitions were filed under chapter 7 or under chapter 13. Most business petitions were filed under chapter 7 or under chapter 11.

Filings under chapter 7 fell 9 percent to 498,367 and constituted 62 percent of all filings, down from 64 percent in 2015 and 69 percent in 2012. Nonbusiness chapter 7 filings, which accounted for 97 percent of all chapter 7 filings, also fell 9 percent and amounted to 62 percent of all nonbusiness filings, down from 64 percent in 2015. Business chapter 7 petitions fell 8 percent and constituted 62 percent of all business filings, down from 66 percent in 2015.

Filings under chapter 13 remained fairly stable, decreasing 1 percent to 299,150. These petitions amounted to 37 percent of all filings, up from 35 percent in 2015 and 30 percent in 2012. The 296,824 nonbusiness chapter 13 petitions, a reduction of 1 percent from 2015, accounted for 38 percent of all nonbusiness petitions, up from 36 percent in 2015. The 2,326 business chapter 13 petitions, an increase of 10 percent from 2015, represented 10 percent of all business filings, up from 8 percent in 2015.

Chapter 11 filings went up 6 percent to 7,450. Chapter 11 cases, which typically require significantly more court resources than chapter 7 or chapter 13 cases, accounted for less than 1 percent of all filings. The 6,329 business chapter 11 petitions amounted to 26 percent of all business filings, up 2 percent from 2015.

The three remaining chapters of the Bankruptcy Code—chapter 9, chapter 12, and chapter 15–collectively accounted for less than 1 percent of all petitions filed.

Although bankruptcy filings decreased nationwide, with all 12 circuits reporting fewer filings, the rates of decline varied across regions. Districts in the Ninth Circuit had a combined drop in filings of 11 percent. Reductions for the other circuits ranged from less than 1 percent to 10 percent.

The Federal Judiciary has 90 bankruptcy courts, one in each judicial district except for the Districts of Guam, the Northern Mariana Islands, and the U.S. Virgin Islands (where the bankruptcy court is a division of the district court), and the Eastern and Western Districts of Arkansas (which share a bankruptcy court). In 2016, 71 of the 90 bankruptcy courts reported fewer filings compared to the previous year. Of the 19 bankruptcy courts that registered growth in filings, the District of North Dakota had the largest, a rise of 13 percent that occurred in conjunction with a decline in oil exploration and production in that region in response to lower oil prices.

Terminations of bankruptcy cases fell 8 percent to 910,122. As terminations outpaced filings, pending cases dropped 8 percent to 1,164,747.

For data on activity in the U.S. bankruptcy courts, see the F series of tables.

Adversary Proceedings

Adversary proceedings are separate civil lawsuits that arise in bankruptcy cases, including actions to object to or revoke discharges, to obtain injunctions or other equitable relief, and to determine the dischargeability of debt. Adversary proceedings may be associated with consumer bankruptcy cases, but most arise in cases filed under chapter 11. They generally reflect the level of chapter 11 bankruptcy petitions filed two years earlier.

In 2016, filings of adversary proceedings fell 13 percent to 29,678. This was 45 percent below the total for 2012, a reduction that mirrors the reduction in bankruptcy filings in general and the decline in filings under chapter 11 in particular. Sixty-two of the 90 bankruptcy courts reported lower filings, and 33 districts had reductions of 20 percent or more (compared to 25 districts in 2015). The largest numeric decrease was in the District of New Jersey, where filings dropped by 453 (down 28 percent) following a surge in filings in 2014 that arose mainly from cases involving the Dot's, LLC bankruptcy filing.

Filings of adversary proceedings rose in 26 bankruptcy courts, with 12 districts registering gains of 20 percent or more (compared to 14 districts in 2015). The District of Delaware reported the largest numeric increase, a rise of 486 filings (up 29 percent), with most arising from cases involving chapter 11 bankruptcy filings in 2015 by two separate companies, RS Legacy Corporation and SRC Liquidation, LLC.

Terminations of adversary proceedings declined 10 percent to 33,281. Pending adversary proceedings dropped 8 percent to 42,761.

Data on adversary proceedings in the bankruptcy courts can be found in Table F-8.