(Click here to read, “Who Are Chapter 13 Bankruptcy Debtors?” part 1.)
In the first post on this topic, I displayed tables from the 2016 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) Report. The report contains a large amount of information, albeit with a little less detail than one would hope, that can help answer questions about who files New York bankruptcy or Brooklyn bankruptcy, and it can give us the idea of what the typical debtor is like.
The first post focused on how long a typical chapter 13 bankruptcy attorney Brooklyn NY lasts. In this second post, I will turn to debtors’ economic circumstances, starting with Table 1D, “Assets and Liabilities Reported by Individual Debtors in Chapter 13 Cases.” As before, I’ll show information on all chapter 13 cases in the U.S., the Eastern District, and the Southern District. I’ve modified it to show the mean averages of cases with complete schedules.
| 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) | ||
| TOTAL | 287,556 | 249,483 | $146,261 | $108,207 | $38,054 | $177,138 | $128,118 | $4,787 | $44,233 | $161,370 |
| NY, E | 3,171 | 1,005 | $437,904 | $389,917 | $47,987 | $441,794 | $388,479 | $12,147 | $41,168 | $426,251 |
| NY, S | 1,631 | 1,128 | $352,900 | $291,053 | $61,847 | $404,282 | $324,264 | $15,811 | $64,207 | $380,353 |
The “Mean Assets” header is self-explanatory, but “Mean Liabilities” is divided into secured claims (e.g. houses or cars), unsecured priority claims (tax debts), and unsecured nonpriority claims (credit-card debt). The far-right column, mean net scheduled debt, is the average amount debtors tried to discharge.
It’s not obvious, but one way the Eastern District stands out is the percentage of debtors with complete schedules. Nationwide, the average is 87 percent, but in the Eastern District, the figure is only one-third. The Southern District comes closer to the national average. The Eastern District’s lower percentage probably corresponds to the short time interval for its chapter 13 cases. There’s likely a relationship between debtors filing incomplete chapter 13s and speedy case closures.
The reason the remaining figures for the Eastern District are in line with the national average and the Southern District is that they come from only cases in which the schedules were complete. These cases probably last longer than those I discussed in part 1 of this series, and the amount of debt scheduled is much greater than for the Southern District or the country, which speaks to the high levels of debts people in the Eastern District have. Importantly, average chapter 13 Brooklyn bankruptcy debtors stand to discharge hundreds of thousands of dollars of debt if they complete their plans.
Next is Table 2D, which is, “Income and Expenses Reported by Individual Debtors in Chapter 13.” As with the other table, I’ve changed some of the amounts to be the mean averages of all cases with completed schedules.
| Circuit and District | Cases | Current Monthly Income | Average Monthly Income | Average Expenses | ||||
|---|---|---|---|---|---|---|---|---|
| Total | With Complete Schedules | Median (in $s) | Total (in $s) | Median (in $s) | Total (in $s) | Median (in $s) | Total (in $s) | |
| TOTAL | 287,556 | 253,788 | $3,335 | $4,163 | $3,162 | $3,915 | $2,535 | $2,927 |
| NY, E | 3,171 | 1,195 | $6,418 | $7,235 | $5,903 | $6,387 | $4,525 | $4,910 |
| NY, S | 1,631 | 1,252 | $5,899 | $6,710 | $5,372 | $5,934 | $4,762 | $5,760 |
The definitions of “current monthly income,” “average monthly income,” and, “average expenses” come from the bankruptcy forms. What’s important here is that debtors appear to earn $1,000 to $2,000 more than they spend. In my earlier posts on this topic for chapter 7, the difference between debtors’ incomes and expenditures was much closer, which makes sense given the chapter they were filing in. Here, we can see that many debtors should be able to craft repayment plans that enable them to continue on in chapter 13.
Notably, debtors in the Eastern and Southern districts have sufficiently high annual incomes that put them well above the median family income threshold that would require them to take the means test in chapter 7. It appears, then, that these debtors are probably right to file in chapter 13.
The 2016 BAPCPA Report also contains tables on the number of chapter 13 property valuation hearings and attorney or creditor misconduct charges, but the information is sparse and not too interesting. The 2016 BAPCPA Report can be found here.
From these two posts on chapter 13 bankruptcy data, we’ve learned that cases in the Southern District of New York slightly trail the national average, though debtors are richer than the national average, which is to be expected. By contrast, cases from the Eastern District tend to be much shorter, and its debtors tend not to complete all their schedules. The likely explanation is that debtors file in chapter 13 for reasons other than completing a three-to-five-year repayment plan.
Whether you see yourself in these numbers or not, if you are experiencing financial difficulties, then consulting with an experienced New York bankruptcy lawyer is the best way to strategize your options, especially if you think chapter 13 might be best 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 bankruptcy attorney Brooklyn NY Bruce Weiner for a free initial consultation.
