U.S. Bankruptcy Courts — Judicial Business 2021
Nationwide, debtors in 2021 filed 434,540 bankruptcy petitions, 178,021 fewer than in 2020.
Nonbusiness (i.e., largely consumer) petitions, which accounted for approximately 96 percent of all petitions, dropped 29 percent to 418,400. Business petitions, which amounted to 4 percent of all petitions, decreased 28 percent to 16,140. The reduction in filings has been attributed mainly to the effects of the COVID-19 pandemic.
Bankruptcy petitions may be filed under one of six chapters of the Bankruptcy Code (chapter 15 is a codification of the Model Law on Cross-Border Insolvency and is intended to provide mechanisms for dealing with insolvency cases with debtors, assets, claimants, and other parties of interest involving more than one country). Most consumer petitions were filed under chapter 7 or under chapter 13. Most business petitions were filed under chapter 7 or under chapter 11.
| Chapter | Description |
|---|---|
| Chapter 7 | Provides that non-exempt assets be liquidated and proceeds distributed to creditors. |
|
Chapter 9
|
Covers local governments and instrumentalities. |
|
Chapter 11
|
Allows businesses to reorganize and continue operating. Also available to individuals whose debts exceed statutory limits for filing under chapter 13. |
|
Chapter 12
|
Covers family farmers and fishermen. |
|
Chapter 13
|
Provides that debtors with regular income retain assets and obtain court-confirmed plans to pay off their creditors. |
|
Chapter 15
|
Applies to foreign corporations and individuals. |
Filings under chapter 7 decreased 24 percent to 310,597 and constituted 71 percent of all cases filed. Nonbusiness chapter 7 filings accounted for 97 percent of all chapter 7 cases filed and amounted to 72 percent of all nonbusiness filings. Business chapter 7 petitions fell 25 percent and constituted 59 percent of all business cases filed, compared with 57 percent in 2020.
Cases filed under chapter 13 fell 39 percent to 117,784. These petitions equaled 27 percent of all filings. Nonbusiness chapter 13 petitions also declined 39 percent, dropping to 116,884 and amounting to 28 percent of all nonbusiness petitions. Business chapter 13 petitions decreased 30 percent and represented 6 percent of all business cases filed, the same as in 2020.
Chapter 11 filings decreased 31 percent to 5,622. Chapter 11 cases, which typically require significantly more court resources than do cases filed under chapter 7 or chapter 13, accounted for 1 percent of all filings. Business petitions filed under chapter 11 fell 32 percent to 5,162 and amounted to 32 percent of all business cases filed, down from 34 percent in 2020.
Filings under chapters 9, 12, and 15 of the Bankruptcy Code collectively accounted for less than 1 percent of all petitions filed.
Bankruptcy filings decreased in all circuits. The DC Circuit had the largest percentage decline over last year as filings there fell 44 percent. The Second Circuit saw a reduction of 35 percent. The Third Circuit received 34 percent fewer filings. The Sixth Circuit reported the largest numeric decrease, a drop of 27,192 cases (down 30 percent from last year).
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 bankruptcy cases are heard by a district court judge or a visiting bankruptcy judge) and except for the Eastern and Western Districts of Arkansas (which share a bankruptcy court). In 2021, all 90 bankruptcy courts reported fewer filings compared with the previous year.
The number of bankruptcy cases terminated fell 20 percent to 579,469. As terminations outpaced filings, pending cases dropped 16 percent to 761,709.
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 a debt. Adversary proceedings may be associated with consumer bankruptcy cases, but most arise in cases filed under chapter 11 (which is typically associated with business bankruptcies). Because of time limits imposed by Section 546 of the Bankruptcy Code, the number of adversary proceedings filed usually is related to the number of chapter 11 cases filed two years earlier.
In 2021, filings of adversary proceedings declined 26 percent to 16,050. This was 42 percent below the total for 2017. Of the 90 bankruptcy courts, filings of adversary proceedings declined in 79 courts, increased in 10 courts, and remained the same in 1 court. Sixty districts had reductions of 20 percent or more (compared with 34 districts in 2020). The largest numeric decrease was a drop of 1,081 filings (down 51 percent to 1,045) in the Southern District of New York. Five districts registered gains of 20 percent or more (compared with 15 districts in 2020). The Southern District of Texas reported the largest numeric growth, an increase of 486 filings (up 86 percent).
Terminations of adversary proceedings declined 10 percent to 19,807. Pending adversary proceedings dropped 16 percent to 20,150.
Data on adversary proceedings in the bankruptcy courts can be found in Table F-8.