ABI Journal

Success Rates in Chapter 13

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Copyright © American Bankruptcy Institute Success Rates in Chapter 13 August 2017 By Ed Flynn O ver the past decade chapter 13 filings have averaged about 355,000 per year, ranging from a low of 296,655 in 2016 to a high of 438,913 in 2010. 1 Well over $60 billion had been collected by chapter 13 trustees and distributed to creditors during this period. 2 These impressive monetary results have been achieved despite the fact that the majority of chapter 13 cases do not result in a completed repayment plan. This article focuses on plan-completion rates based on the following four factors that are known at the time the case is filed: 1. Did the debtor have an attorney? 2. Was the filing a joint case involving a married couple? 3. Were filing fees paid in full at the time of filing? 4. Did the debtor report having one or more prior filings? The Federal Judicial Center, in partnership with the Administrative Office of the U.S. Courts (AOUSC), has recently made available an extensive Interactive Data Base (IDB) of bankruptcy cases. The IDB con- tains a record for every bankruptcy case filed and closed since 2008. This data allows researchers to work with case-level data rather than summary data. The main sample used for this article consists of 123,185 cases originally filed as chapter 13s that were closed between fiscal years 2010 and 2016. It includes all cases closed on one day per month (randomly selected) for each of the 84 months during this period. 3 There is relatively little chapter 13 activity in some states. To compute statewide figures for pro se cases and prior filings, if a state had less than 300 cases in the original sample, all chapter 13 cases closed from fiscal years 2010-16 were used. 4 Data Limitations Data on three of the four factors under consideration is not available for every case. For example, data on prior filings was not reported for cases filed prior to October 2006 (reporting started one year after the effective date of Bankruptcy Abuse Prevention and Consumer Protection Act of 2005). In addition, information on whether filing fees were paid is not available for cases filed prior to October 2005, and information on whether a case was filed pro se is missing for some cases filed prior to October 2006. In total, data was missing for one or more of these factors in about 9 percent of the IDB samples (11,037 out of 123,185 cases). All of the cases with missing data were at least three years old when they were closed, indicating that most had ended after completion of a repayment 1 See "Caseload Statistics Data Tables," U.S. Courts, available at uscourts.gov/statistics-reports/caseload-statistics-data-tables (unless otherwise specified, all links in this article were last visited on June 22, 2017) 2 See "Chapter 13 Trustee Data and Statistics," U.S. Department of Justice, available at www. justice.gov/ust/private-trustee-data-statistics/chapter-13-trustee-data-and-statistics. 3 The IDB contains a separate record for each year that a case is pending, so more than one record exists for many chapter 13 cases. For this article, the record from the year that each case was closed was used, regardless of when the case was filed. 4 Low-volume chapter 13 states for which the entire population of closed cases was used include Alaska, Delaware, Hawaii, Idaho, Iowa, Maine, Montana, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, Wyoming and Washington, D.C. Coordinating Editor Ed Flynn ABI; Alexandria, Va.

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