2017 is pretty far in the rearview mirror, but it’s still the most recent year for which the federal courts have provided data via the Bankruptcy Abuse Prevention and Consumer Protection Act Report (BAPCPA Report). The tables in this report can help New York bankruptcy lawyers and debtors get an idea of just who chapter 13 debtors are and if there have been any significant changes in chapter 13 New York bankruptcy and Brooklyn bankruptcy since 2016. (Click to read “Who Are Chapter 13 Bankruptcy Debtors?” for more information from the 2016 report.) Looking at the data can help us understand what the typical debtor looks like in the Southern (SDNY) and Eastern (EDNY) districts of New York.
To begin with, we learned from the Statistical Tables for the Federal Judiciary (“Statistical Tables”) that in 2017 bankruptcy filings were down nationwide but not in new York. Noticeably, the total number of chapter 13 filings in the EDNY rose from 3,202 to 5,404 (+2,202), and they went from 1,680 to 1,966 (+286) in the SDNY. However, this shift might not be reflected in the BAPCPA Report because a similar look into chapter 7 filings did not show them.
Turning to the BAPCPA Report’s Table 1D, which depicts debtors’ assets and liabilities, the numbers appear about the same as those in the Statistical Tables. In the EDNY, chapter 13 bankruptcies rose from 3,171 to 5,353 (+2,182), and in the SDNY they went from 1,631 to 1,906 (+275). Along with the growth in chapter 13 cases, aspects of the average cases have changed as well, as illustrated in this table.
|Circuit and District||Cases||Mean Assets||Mean Liabilities||Mean Net Scheduled Debt (in $s)|
|Total||With Complete Schedules||Total (in $s)||Real Property (in $s)||Personal Property (in $s)||Total (in $s)||Secured Claims (in $s)||Unsecured Priority Claims (in $s)||Unsecured Nonpriority Claims (in $s)|
In the EDNY, the most prominent shifts are in average personal-property assets (+$185,023) and secured liabilities (+45,062). In the SDNY, the amount of assets are about the same in the average case, but the liabilities are much higher as well: nearly $300,000 in secured claims in the average case. These are pretty remarkable swings, but they may be due to a handful of outliers and not shifts in the typical case. It would help if the BAPCTA Report reported the median case in this table.
Table 2D tracks chapter 13 debtors’ incomes and expenses. Unlike chapter 13 debtors’ assets and liabilities, the averages were about the same for both the EDNY and SDNY. In the EDNY, the median debtor’s current monthly income was $6,706 ($80,472 annually), and in the SDNY it was about $5,850 ($70,200). The median EDNY debtor’s monthly expenses were $4,440 ($53,280), and for SDNY they were $4,900 per month ($58,800).
Next, Table 3 lists time intervals from filing to closing for debtors whose cases closed in 2017. In the EDNY, the interval of the median case was shorter, shrinking from 99 to just 90 days. In the SDNY, however, the interval grew significantly from 989 to 1,759 days. This is nearly five years indicating that SDNY debtors are completing their plans.
Speaking of plan completion takes us to Table 6, which measures the number of chapter 13 debtors whose cases closed either by dismissal or plan completion in the twelve months preceding December 31, 2017. Although this information is given in raw numbers, it’s more intelligible as percentages of plan completions of total cases closed. In the EDNY in 2016, that was 20 percent, but in 2017 it was just 10 percent. By contrast, chapter 13 debtors in the SDNY had a plan completion percentage of 47 percent in 2016, but that rose to 60 percent in 2017.
In short, compared to 2016, chapter 13 cases in EDNY in 2017 grew, tended to have more personal-property assets and secured liabilities, were shorter, and were less likely to result in plan completion. Meanwhile, in the SDNY, there were a similar number of cases with much higher secured claims, and cases closing in 2017 tended to last longer and were much more likely to reach plan completion.
The 2017 BAPCPA Report is here.
It’s possible there was some misreporting in the data that caused some of the wilder swings in the statistics, but even so, not all bankruptcies are like the average or even the median one. Nevertheless, the data should give debtors an idea of what chapter 13 bankruptcy looks like in New York, Brooklyn, and Long Island. If you are experiencing serious financial difficulties then talking to an experienced New York bankruptcy lawyer can help you decide whether chapter 13 is the best course of action for you.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.