Consumers filing for bankruptcy in 2016 reported aggregated assets of $72 billion and aggregated total liabilities of $191 billion, a decline from the previous year, according to an annual report filed by the Judiciary with Congress.
The report, required by Congress under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, describes the activities of individuals with predominantly consumer debt. Other highlights of the report are:
- Total assets by consumer debtors fell 7 percent from 2015 and total liabilities decreased by about 8 percent, according to the report. Seventy percent of assets were real property, and the remaining assets were personal property.
- Debtors in the Southern District of California and in the Northern District of California reported the highest average assets per petition at $344,000 and $224,000, respectively. Filers in the Western District of Tennessee reported the lowest average assets, $43,000.
- The median average income reported by debtors was $2,668 a month, and the median average monthly expenses were $2,590.
- There was a total of 750,000 consumer bankruptcy petitions filed in 2016, 6 percent fewer than in 2015.
- About 61 percent of the petitions were filed under Chapter 7, in which a debtor’s assets are liquidated and proceeds are distributed to creditors, except for exempt assets. About 38 percent were filed under Chapter 13, in which debtors make installment payments to creditors under court-ordered plans. Debtors were able to successfully pay their debts in a little over half of the Chapter 13 cases closed in 2016 – 52 percent.
- Only one-tenth of 1 percent of petitions by individuals with consumer debts were filed under Chapter 11, which allows businesses and individuals to continue operating while they make plans to reorganize and repay creditors.
The data for the report is provided by the debtors either at the time they file bankruptcy petitions or within two weeks of filing, which is required by federal bankruptcy rules. – Source