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April/May
2004 |
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Letter
from the Executive Director
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Within the last few weeks, the
Administrative Office of the U.S. Courts has released bankruptcy
statistics for 2003 and the dollar adjustments effective April
1, 2004.
Bankruptcy Filings
Total bankruptcy filings during 2003 amount to 1,660,245, according
to data released by the Administrative Office of the U.S. Courts,
representing an increase of 5.2 percent over the prior year filings.
Business bankruptcy filings, representing just over 2 percent
of all filings, of 35,037 was 9 percent less than the 38,540 business
petitions filed in 2002. This was the second year in a row that
the number of business filings has decreased while the total number
of petitions filed increased. During 2003, chapter 11 filings
declined by 16.6 percent to 9,404 petitions, from the 11,270 petitions
filed in 2002. There was an increase in the number of chapters
7, 12, and 13 filings. While the number of filings during the
last half of 2003 was less than the first half, the number was
larger than the filings during the last half of 2002. This decline
may suggest there will be decline in the total filings in 2004.
Dollar Amount Adjustments
On April 1st of every third year, selected dollar amounts are
adjusted to reflect the change in the Consumer Price Index for
All Urban Consumers published by the United States Department
of Labor for the three preceding years. The most recent adjustments,
effective for all petitions filled on or after April 1, 2004,
were made for the three year period ending December 31, 2003.
A schedule of the current dollar limit and the revised dollar
limit is show below.
Official Forms 6E dealing with
the schedules of creditors holding priority claims and Form 10,
Proof of claim contain references to the relevant dollar amounts
and have been revised to be used with all petitions filed after
April 1, 2004.
Dollar Amounts Adjustments
(Effective April 1, 2004)
Item |
Prior
Dollar Limit |
Revised
Dollar Limit |
| Section
109(e): Debt limits for filing chapter 13: Unsecured |
$290,525
|
$307,675
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| Secured |
871,550 |
922,975 |
| Section 303(b): Minimum aggregate
claims for involuntary case |
1,625 |
12,300 |
| Section 507(a)(3): Priority claims
for wage |
4,650 |
4,925 |
| Section 507(a)(4): Maximum claim for
employee benefit plans |
4,650 |
4,925 |
| Section 507(5): Claim against grain/fishery
storage/process plant |
4,650 |
4,925 |
| Section 507(6): Claim for deposit
for household product or service |
2,100 |
2,225 |
| Section 522(d)(1): Exemptions for
residence |
17,425 |
18,450 |
| Section 522(d)(2): Exemptions for
motor vehicle |
450 |
475 |
| Section 522(d)(3): Exemptions for
aggregate for personal item |
9,300 |
9,850 |
| Section 522(d)(4): Exemptions for
jewelry |
1,150 |
1,225 |
| Section 522(d)(5): Exemptions for
any property |
925 |
975 |
| Section 522(d)(5): Exemptions for
unused residence exemption |
8,725 |
9,250 |
| Section
522(d)(6): Exemptions for tools of trade |
1,750 |
1,850 |
| Section 522(d)(8): Exemptions for
accrued dividends interest, etc. |
9,300 |
9,850 |
| Section 522(d)(11)(D)): Exemptions
for bodily injury payments |
17,425 |
18,450 |
| Section 523(a)(2)(C): Luxury goods/cash
advances - consumer debt |
1,150 |
1,225 |
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Best Regards,
Grant W. Newton, CIRA
Executive Director
Grant W. Newton, CIRA, CMA, CPA,
Ph.D., is a Professor of Accounting at Pepperdine University in
Malibu, California. He teaches accounting and finance courses
in the Graziadiao School of Business and Management. Grant is
the author of Bankruptcy and Insolvency Accounting: Practice and
Procedure, 6th edition (2000 and updated annually) and co-author
with Gilbert D. Bloom of Bankruptcy and Insolvency Taxation, 2nd
edition (updated annually) published by John Wiley & Sons.
His articles have appeared in Journal of Accountancy, Management
Accounting, Practical Accountant, CPA Journal, Commercial Law
Journal and others.
Grant is the Executive Director
of the Association of Insolvency and Restructuring Advisors (AIRA).
He developed the three courses that lead to the Certified Insolvency
and Reorganization Accountant (CIRA) designation. Grant teaches
the three two-day CIRA courses and develops and administers the
CIRA examination.
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