ILNews

Hoosier bankruptcy filings among highest

Michael W. Hoskins
January 1, 2008
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Bankruptcy filings have increased so much in Indiana that some U.S. trustees handling Chapter 7 proceedings may want to add an extra session each month to hear new cases.

Attorneys statewide are seeing more clients from an uptick in filings, and as a result are not surprised to hear that federal filings across the country surged 38 percent in 2007. Nor are they surprised that Indiana ranked fourth highest in the nation overall and top in the country for the number of Chapter 7 filings last year.

"It doesn't surprise me that numbers are up," said Fort Wayne bankruptcy attorney Edward Craig. "Indiana isn't the best place to practice (bankruptcy) law in the world, but in terms of need there's no better place. This is still a lucrative practice."

Figures released Tuesday from the Administrative Office of the U.S. Courts show federal bankruptcy filings surged 38 percent last year, a significant jump following a year that saw sharp declines after the Bankruptcy Abuse Prevention and Consumer Prevention Act took effect in October 2005.

A historic high came in 2005 prior to the federal law, when more than 2 million bankruptcies were filed. Overall filings fell sharply in 2006 to about 617,580 but started climbing again last year, reaching 850,912 filings, figures show. Chapter 7 filings increased 44 percent, from 360,890 to 519,364 filings; Chapter 13 filings increased 29 percent, from 251,179 to 324,773 filings. The Chapter 11 filings jumped 23 percent while the Chapter 12 filings rose by less than 1 percent, figures show.

Tennessee, Georgia, and Alabama ranked first through third in total Chapter 7 and Chapter 13 bankruptcy filings, respectively. In Indiana, the Northern District Bankruptcy Court saw a surge greater than the national average while the Southern District closely mirrored what was happening nationally. The Northern District filings increased from 8,279 in 2006 to 11,764 last year; the Southern District jumped from 13,955 to 19,358 in 2007.

About 8,583 filings in the Northern District represented Chapter 7 bankruptcies, while 12,846 were in that category in the Southern District, the figures show.

In Indianapolis, bankruptcy attorney Jim Young with Rubin & Levin said his colleagues are not surprised by the increase in filings.

"We've been speculating as to when it would start picking up, and this shows that's happening," he said. "Normally, the Indianapolis panel (of trustees) would have two days a month when they'd hear new cases, but starting in May they are starting a third session. That's a consistent indication of how much the bankruptcy caseload is picking up for the trustees."

Young said that Indiana's economy, as in other states seeing similar high bankruptcy filings, is a main reason for the increase.

The current level of bankruptcy filings is probably close to where it should be, or is at least getting to that point, said Craig.

"You have to go pre-scare, not just pre-2005," he said. "That goes before 2001 or maybe even before the rumblings of bankruptcy reform in the late 1990s. Numbers now are close to that (2000) level, and 2008 is promising to turn out to be comparable."
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  1. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  2. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  3. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

  4. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  5. This article proved very enlightening. Right ahead of sitting the LSAT for the first time, I felt a sense of relief that a score of 141 was admitted to an Indiana Law School and did well under unique circumstances. While my GPA is currently 3.91 I fear standardized testing and hope that I too will get a good enough grade for acceptance here at home. Thanks so much for this informative post.

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