IMGCAP(1)]
Chapter 7 business bankruptcy filings increased by 124 in July to 3,389, an increase of 3.8% from the previous month, according to D&B Corp.'s monthly U.S. bankruptcy report.
The July total increased 37.6% from 2,373 filings reported during July of last year. Chapter 7 of the U.S. Bankruptcy Code provides for the liquidation, or sale of a debtor's nonexempt property and the distribution of the proceeds to its creditors.
Chapter 11 business bankruptcy filings, which enable a debtor to propose a plan of reorganization to keep its business and pay creditors over time, totaled 981 in July down 11.1% from the previous month, but 52.8% higher than the same period a year earlier, according to the Short Hills, N.J.-based provider of business information.
Twenty-one businesses filed for Chapter 12 bankruptcy protection in July, two more than in June, and nearly twice as many as the 11 filings in July 2008. Chapter 12 is designed for family farmers or fishermen with regular annual income to propose a plan to repay all or part of their debts.
Chapter 13 filings totaled 976 in July, a 3.7% increase compared with 941 in June, and a 34.3% increase compared with 727 filings during the same period a year earlier. Chapter 13 of the Bankruptcy Code is available for individuals with regular incomes whose debts do not exceed specific amounts, and debtors typically use such filings to budget some of their future earnings under a plan through which unsecured creditors are at least partially paid back.
