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Bankruptcy Rush

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As U.S. House-Senate bankruptcy conferees convene today for a final debate over amendments to bankruptcy reform legislation, Americans are flooding the courts with bankruptcy petitions. During the first three months of this year, 379,012 bankruptcy petitions were filed, the highest number of cases ever filed in any first calendar quarter. The total filings also broke the bankruptcy filing record for any 12-month period. Bankruptcy filings rose from 1,307,857 in the 12-month period ended March 2001 to 1,504,806 in the same time period in 2002. Chapter 7 filings increased 17.2%, from 904,397 in 2001 to 1,059,777 in the 12-month period ending March 31, 2002. Chapter 13 filings rose 10.2%, from 393,033 to 433,107 at the end of March 2002. According to the Administrative Office of the U.S. Courts, the filings per authorized judgeship have risen from 2,965 filings per judgeship in March 1992 to 4,644 in March 2001. The bankruptcy reform bill now being considered in Congress would authorize 27 new bankruptcy judgeships. The bankruptcy legislation is hung up on an abortion debate. If the abortion can be resolved this week then there is a strong chance it will be on the President’s desk in June. Once the President signs the law, it will take effect in 180 days. Bankruptcy reform bills were first introduced in Congress five years ago.

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