Cycling Through Chapter 13

Scott Norberg and Andrew Velkey's seven district longitudinal study on chapter 13 has just been published in the Creighton Law Review (volume 39, p. 473).   It contains too many interesting findings for just one post, so I will focus for now on repeat filings.  In Norberg and Velkey's words, "Among the most remarkable findings of the Project is that at least half of all of the Chapter 13 debtors in the sample had filed one or more bankruptcy cases in addition to the sample case."  (p. 497, emphasis added).  The percentage could be higher because of limits of the PACER system.  Most of the prior or subsequent filings that Norberg and Velkey found also were in chapter 13, and most took place within a year of the sample case. The Norberg and Velkey sample precedes the screening of repeat filers implemented by the 2005 bankruptcy bill, so it is possible -- although no foregone conclusion -- that the timing patterns could change.  Nonetheless, if the project sample is representative of all chapter 13 filers, the filing rates reported by the government (see Bob's recent post) have overstated the number of actual households in bankruptcy because each new filing gets a different case number. In any event, those who believe that chapter 13 is an ideal form of bankruptcy and thus praise districts that report higher proportions of chapter 13 cases should take a closer look.