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Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

December 2008: 

Bankruptcy: 

Judiciary Should Take Further Steps to Make Bankruptcy Data More 
Accessible: 

GAO-09-28: 

GAO Highlights: 

Highlights of GAO-09-28, a report to congressional requesters. 

Why GAO Did This Study: 

There have been long-standing questions about a lack of comprehensive 
and reliable information on consumer bankruptcies. The Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2005 (Bankruptcy Reform Act) 
required the federal judiciary’s Administrative Office of the U.S. 
Courts (AOUSC) to collect and report certain additional bankruptcy 
statistics and required the U.S. Trustee Program, which oversees 
bankruptcy case administration, to develop uniform final reports that 
provide certain specified data about each case. 

GAO was asked to examine the (1) availability and accessibility of data 
from the personal bankruptcy system and (2) potential benefits and 
limitations of the new data requirements of the Bankruptcy Reform Act 
in addressing these issues. GAO examined bankruptcy data systems and 
obtained documentation and interviewed staff from AOUSC, bankruptcy 
courts, and the Trustee Program; groups representing consumers and 
creditors; data providers; and academic researchers and other 
stakeholders. 

What GAO Found: 

There are limitations to the availability, accuracy, and accessibility 
of data on consumer bankruptcies. AOUSC publishes certain aggregate 
statistics related to the numbers of filings, but few data are 
available on the causes of bankruptcy and the characteristics of 
bankruptcy filers. Studies show that the information in the bankruptcy 
case files is not always accurate because much of it is self-reported 
by debtors who frequently make errors, although these data are 
sufficiently reliable for the purposes of initiating a bankruptcy case. 
Bankruptcy case files are publicly accessible through the Public Access 
to Court Electronic Records system, but not in a format that allows the 
data they hold to be easily extracted and used for research or 
analysis. Another system, the U.S. Party/Case Index, was designed for 
nationwide searches for individual cases; while it serves that purpose, 
its search parameters are limited and the output does not include much 
of the data held in the system. Several factors create challenges to 
expanding data on consumer bankruptcies—most notably, privacy and 
security concerns related to facilitating public access to the highly 
personal data contained in bankruptcy files. The federal judiciary also 
has noted that collection of demographic and other additional data is 
not its mission and would require further resources. Nonetheless, a 
range of bankruptcy stakeholders, including some judges, researchers, 
and U.S. Trustee Program staff, have suggested that the judiciary 
identify and implement practicable ways to improve public access to 
data that already exist in its data systems, which could facilitate 
scholarly research and the formulation of bankruptcy policy and 
legislation. 

While the data requirements of the Bankruptcy Reform Act are a step 
toward making more information on consumer bankruptcies available, 
their value is likely to be limited. The new annual statistics will 
provide some additional information that may be helpful in identifying 
differences in bankruptcy cases across judicial districts. In addition, 
the uniform final reports required by the act will standardize the data 
in the reports and assist the U.S. Trustee Program in overseeing case 
administration. However, for several reasons the statistics required 
under the act are likely to be of limited value. For example, many of 
the statistics are relatively narrow in scope and were not intended to 
provide certain key information, such as the causes of bankruptcy and 
the demographic characteristics of filers. Further, the AOUSC data are 
provided as aggregated statistics—rather than data on individual 
cases—which limits the extent to which they can be analyzed. As such, a 
variety of stakeholders in the bankruptcy process told us that the 
underlying case-level data used to generate the statistics could be 
useful if made publicly available as a data set. AOUSC currently has no 
plans to provide public access to these case-level data, in part, 
officials say, because they first need to identify and address privacy 
and security issues. GAO acknowledges the importance of those issues, 
but believes that better access to bankruptcy data already held in the 
judiciary’s data systems—such as these case-level data—would allow 
external parties to assess the data’s reliability and limitations and 
could facilitate empirical research and the formulation of bankruptcy 
policy. 

What GAO Recommends: 

GAO recommends that AOUSC expeditiously identify and implement—subject 
to appropriate privacy and security safeguards—measures to further 
improve the public accessibility of bankruptcy data it already 
maintains in its information systems. AOUSC said it will carefully 
consider GAO’s recommendation. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-28]. For more 
information, contact Yvonne D. Jones at (202) 512-6806 or 
jonesy@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Limitations Exist to the Availability, Accuracy, and Accessibility of 
Information on Consumer Bankruptcies: 

Bankruptcy Reform Act's Data Requirements Provide Some Benefits, but 
Several Factors Limit the Usefulness of the Data: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comments from the Administrative Office of the United 
States Courts: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Summary of Annual Statistics Required by 28 U.S.C. section 159 
(as added by section 601 of the Bankruptcy Reform Act) for Chapter 7, 
Chapter 11, and Chapter 13 Consumer Bankruptcy Cases: 

Table 2: Summary of Data Required by 28 U.S.C. section 589b (as added 
by section 602 of the Bankruptcy Reform Act) to be Included in Uniform 
Final Reports for Cases under Chapter 7, Chapter 12, and Chapter 13: 

Figure: 

Figure 1: Overview of the Bankruptcy System: 

Abbreviations: 

AOUSC: Administrative Office of the U.S. Courts: 

Bankruptcy Reform Act: Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2005: 

Bankruptcy Rules: Federal Rules of Bankruptcy Procedure: 

CM/ECF: Case Management/Electronic Case Files: 

Judicial Conference: Judicial Conference of the United States: 

PACER: Public Access to Court Electronic Records: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

December 18, 2008: 

Congressional Requesters: 

Over the past decade, Americans have filed more than 13 million 
consumer bankruptcy cases, yet relatively little is known about the 
characteristics of these individuals, the factors that led to their 
seeking bankruptcy protection, or the outcomes and consequences of 
their cases. Questions about the lack of certain information on 
consumer bankruptcies have existed for some time. Numerous studies, 
including the 1997 report of the National Bankruptcy Review Commission-
-an independent commission created by Congress--have noted that 
relatively little is known about the characteristics of consumer 
bankruptcies and that relatively little empirical data are available 
through the bankruptcy system.[Footnote 1] The commission report noted 
that better bankruptcy data could shed light on important questions of 
interest to Congress, the judiciary, and other stakeholders in the 
bankruptcy system, such as debtors, creditors, and scholars. For 
example, better data could help inform policy questions dealing with 
the effect of bankruptcy on unsecured creditors and the costs of 
particular types of cases. 

In 2005, Congress enacted major bankruptcy reform legislation with the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 
(Bankruptcy Reform Act).[Footnote 2] The act sought to expand the 
information available about consumer bankruptcies by imposing new data 
collection and reporting requirements on both the federal judiciary, 
which includes the 90 bankruptcy districts and the Administrative 
Office of the U.S. Courts (AOUSC), and the Department of Justice's U.S. 
Trustee Program (Trustee Program), which oversees the administration of 
bankruptcy cases in most judicial districts. The act required the 
judiciary to collect and report annual statistics--presented in the 
aggregate and by judicial district--on certain characteristics and 
outcomes of consumer bankruptcies.[Footnote 3] The act also required 
the Attorney General, who delegated the authority to the Trustee 
Program, to draft rules requiring private trustees to submit uniform 
final reports on individual bankruptcy cases that included certain 
specific information about the case.[Footnote 4] 

You asked us to review issues related to the availability of data on 
consumer bankruptcies. Specifically, this report examines (1) the 
availability and accessibility of data from the bankruptcy system and 
(2) the potential benefits and limitations of the new data requirements 
of the Bankruptcy Reform Act in addressing these issues. This report 
focuses on consumer, or personal, bankruptcies rather than business 
bankruptcies. 

To address the first objective, we reviewed materials produced by the 
National Bankruptcy Review Commission, as well as academic literature 
that has used, studied, or commented on the data on consumer 
bankruptcies that are available from the court system and Trustee 
Program. We also reviewed our past work that has used bankruptcy data. 
In addition, we gathered information on the relevant data systems and 
statistical infrastructures of the judiciary and Trustee Program. To 
address the second objective, we reviewed provisions of the Bankruptcy 
Reform Act and documentation from the federal judiciary and Trustee 
Program that are related to implementation of the act's data 
provisions, including changes to official bankruptcy forms and proposed 
and final rules. To address both objectives, we spoke with staff from 
the AOUSC's statistics and information technology divisions, bankruptcy 
court judges, bankruptcy clerks and their staff, Trustee Program staff 
responsible for information technology and trustee oversight, Trustee 
Program regional offices, representatives of private trustees, 
bankruptcy attorneys, academic researchers, data providers, 
representatives of consumer and financial services industry 
organizations, and other stakeholders in the bankruptcy system. 

We conducted this performance audit from June 2007 through December 
2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Results in Brief: 

Limitations exist to the availability, accuracy, and accessibility of 
data on consumer bankruptcies. AOUSC publishes certain aggregate 
statistics on the numbers of bankruptcy filings each quarter. In 
addition, the bankruptcy case files maintained by the judiciary contain 
a large amount of information, including financial data such as assets 
and liabilities and case dockets that reflect the significant events of 
each case. However, the statistics and case files provide very little 
information about certain key characteristics of consumer bankruptcies, 
such as the demographic characteristics of filers, the specific nature 
of the underlying debt, the reasons for the bankruptcy, and its long- 
term effect on the filer. Studies show that the information in the 
bankruptcy files is not always accurate, largely because it is self- 
reported by debtors, who frequently make errors. This information is 
sufficiently reliable for the purposes of initiating a bankruptcy case, 
but of limited value for research or statistical purposes. Various 
factors affect the ability to expand the data available from the 
bankruptcy system. Facilitating electronic public access to personal 
information in bankruptcy files can raise privacy concerns, as well as 
the potential for enabling identity theft or the targeting of 
bankruptcy filers for exploitative financial products. The federal 
judiciary also has noted that collection of demographic or other data 
unrelated to the operations of the courts is not its mission and would 
require additional resources. The judicial process also may not be well 
suited to capturing certain types of information, such as the reasons a 
consumer files for bankruptcy, and the decentralization of the federal 
court system can create challenges in ensuring consistent data 
collection and reporting. The public can access data maintained by the 
judiciary, as well as documents from individual bankruptcy cases, but 
the case files are not available in a format that allows the data to be 
easily compiled and analyzed. "Data-enabled" bankruptcy forms--which 
allow information to be easily extracted and transferred to a database-
-could significantly enhance the usability of data in the system, but 
the federal judiciary has declined for now to mandate their use, citing 
certain technical, privacy, and security concerns. The U.S. Party/Case 
Index was designed to allow nationwide searches of individual 
bankruptcy cases, and although it serves that function, its search 
parameters are limited and the results do not include much of the data 
held by the system. AOUSC staff told us that the index was not designed 
to provide a range of data on individual cases. But many stakeholders-
-including some judges, researchers, and Trustee Program staff--have 
suggested that improving public accessibility to data in this or other 
judiciary data systems could improve knowledge about the bankruptcy 
system, assist in policy formulation, and be consistent with section 
604 of the Bankruptcy Reform Act, which called for a national policy of 
maximizing the release of bankruptcy data in a usable electronic form. 

While the data collection and reporting requirements of the Bankruptcy 
Reform Act are a step toward making more information about consumer 
bankruptcies available, for several reasons their value is likely to be 
limited. AOUSC provided its first annual report to Congress on June 23, 
2008, containing the statistical tables and analysis required by the 
act. These new bankruptcy statistics may be useful in understanding 
certain characteristics and outcomes--such as debtors' average income 
and the number of cases dismissed--and may help identify differences 
among judicial districts. In October 2008, the Trustee Program issued a 
rule requiring private trustees to use uniform final reports beginning 
April 1, 2009. The use of a single set of reports should improve the 
consistency of the data and will add new information that may be useful 
for trustee oversight or other purposes. However, several factors limit 
the usefulness of the new reported annual statistics and uniform final 
reports. For example, the required data were not intended to provide 
certain key information, such as the causes of bankruptcy and the 
demographic characteristics of filers. Further, the requirement is for 
AOUSC to report aggregate statistics--rather than case-level data-- 
limiting the value of the information. In addition, the scope of 
information provided by some of the specific data elements is 
relatively narrow. For example, the act requires AOUSC to report the 
number of cases in which creditors were fined for misconduct, but 
because courts reprimand creditors in a variety of ways, this statistic 
provides only a limited picture of the sanctions applied to creditors. 
Despite the statistics' limitations, some stakeholders in the 
bankruptcy process told us it would be beneficial for AOUSC to make the 
underlying case-level data publicly available, which would permit 
additional analyses of factors such as differences in debtors' income, 
assets, and liabilities. AOUSC currently has no plans to make these 
case-level data available, citing concerns about privacy and security, 
as well as the reliability of the data. Privacy and security issues 
would indeed need to be resolved before providing public access to the 
data. However, releasing these data would allow external parties to 
assess the data's reliability and limitations and would be consistent 
with section 604 of the Bankruptcy Reform Act. 

This report recommends that the Director of AOUSC expeditiously 
identify and implement--subject to appropriate privacy and security 
safeguards--measures to improve public accessibility to those 
bankruptcy data that AOUSC already maintains in its information 
systems. 

We provided a draft of this report to AOUSC and the Trustee Program, 
which provided technical comments that we incorporated as appropriate. 
In addition, the AOUSC provided written comments, in which it said it 
would carefully consider GAO's recommendation. It said that the 
judiciary already provides a high level of access to case records and 
information and reiterated the need to balance access and privacy 
interests in making decisions about widespread public disclosure and 
dissemination of information in case files. 

Background: 

Bankruptcy is a federal court procedure designed to help both 
individuals and businesses eliminate debts they cannot fully repay as 
well as help creditors receive some payment in an equitable manner. The 
filing of a bankruptcy petition in most cases operates as an "automatic 
stay" that essentially prohibits most creditors from taking any action 
to attempt to collect a debt pending the resolution of the bankruptcy 
proceeding. Individuals usually file for bankruptcy under one of two 
chapters--Chapter 7 or 13--of the Bankruptcy Code. Under Chapter 7, the 
filer's eligible nonexempt assets are reduced to cash and distributed 
to creditors in accordance with distribution priorities and procedures 
set out in the Bankruptcy Code. Under Chapter 13, filers submit a 
repayment plan to the court agreeing to pay part or all of their debts 
over time, usually 3 to 5 years. Upon the successful completion of both 
Chapter 7 and 13 cases, the filer's personal liability for eligible 
debts is discharged at the end of the bankruptcy process, and creditors 
may take no further action against the individual to collect any unpaid 
portion of the debt.[Footnote 5] 

The U.S. bankruptcy system is complex and involves entities in both the 
judicial and executive branches of government (see figure 1). 

Figure 1: Overview of the Bankruptcy System: 

[Refer to PDF for image] 

This figure is an illustration of an overview of the bankruptcy system, 
as follows: 

Judicial branch: 
* Judicial Conference of the United States) Judiciary's principal 
policymaking body); 
- Administrative Office of the U.S. Courts (Supports judiciary; 
provides administrative, legal, financial, management, program, and 
technology services); 
* U.S. bankruptcy courts; 
- Adjudicate bankruptcy cases). 

Executive Branch: 
* Department of Justice; 
* Executive Office for U.S. Trustees; 
- Through the U.S. Trustee Program, oversees operations and functions 
of field offices; 
- Provides policy guidance to 21 regional U.S. Trustees; 
* U.S. Trustees; 
- Oversee bankruptcy cases filed in region; 
- Oversee activities of private case trustees; 
* Private Trustees; 
- Administer individual bankruptcy cases. 

Source: GAO analysis. 

Note: While not shown in this graphic, the judicial branch oversees 
private trustees in six judicial districts. 

[End of figure] 

Within the judicial branch, 90 federal bankruptcy districts have 
jurisdiction over bankruptcy cases. The Judicial Conference of the 
United States (Judicial Conference) serves as the judiciary's principal 
policy-making body and recommends national policies and legislation on 
all aspects of federal judicial administration. AOUSC is an agency 
within the judicial branch and serves as the central support entity for 
federal courts, including bankruptcy courts, providing a wide range of 
administrative, legal, financial, management, and information 
technology functions. The Director of AOUSC is supervised by the 
Judicial Conference. AOUSC has developed and supports nationwide data 
systems to manage and maintain information on bankruptcy cases, but 
these systems are largely operated, managed, and maintained at the 
local courts. 

Within the executive branch, the Trustee Program, a component of the 
Department of Justice, oversees the administration of most bankruptcy 
cases. The program consists of the Executive Office for U.S. Trustees, 
which provides general policy and legal guidance, oversees operations, 
and handles administrative functions, as well as 95 field offices and 
21 U.S. Trustees--federal officials charged with supervising the 
administration of federal bankruptcy cases.[Footnote 6] The Trustee 
Program appoints and supervises approximately 1,400 private trustees, 
who are not government employees, to administer bankruptcy estates and 
distribute payments to creditors. To document their administration of 
cases, private trustees file "final reports" with the bankruptcy courts 
and submit them to the U.S. Trustees. 

The procedural aspects of the bankruptcy process are governed by the 
Federal Rules of Bankruptcy Procedure (Bankruptcy Rules) and local 
rules of each bankruptcy court. The Bankruptcy Rules contain a set of 
official forms for use in bankruptcy cases. The document filed by the 
debtor to open a bankruptcy case is known as the voluntary petition, 
which the debtor may amend (make changes to) at any time before the 
case is closed. Most debtors who file for bankruptcy use an attorney, 
but some debtors represent themselves without the aid of an attorney 
and are referred to as pro se debtors. Most documents associated with 
bankruptcy cases are public records and, with certain exceptions, the 
information contained in a bankruptcy file is publicly accessible. 

The Bankruptcy Reform Act was signed into law on April 20, 2005, and 
most of its provisions became effective on October 17, 2005. The act 
made substantial changes to the Bankruptcy Code, significantly changing 
consumer bankruptcy practice. It also sought to address, at least in 
part, long-standing concerns about perceived shortcomings of the 
bankruptcy data system that had been identified by the National 
Bankruptcy Review Commission and other parties. The act required the 
federal judiciary to collect and report certain new aggregate 
statistics. It also required the Attorney General (who delegated the 
authority to the Trustee Program) to issue rules requiring that private 
trustees submit uniform final reports containing prescribed information 
on individual bankruptcy cases. 

Limitations Exist to the Availability, Accuracy, and Accessibility of 
Information on Consumer Bankruptcies: 

AOUSC publishes certain aggregate statistics related to the numbers of 
bankruptcy filings. Documents within individual case files contain a 
range of information, but few data exist on the causes of bankruptcy 
and the characteristics of bankruptcy filers. There has been long- 
standing recognition that much of the data in the bankruptcy system may 
not be accurate--largely because much of the data is self-reported by 
debtors in the official bankruptcy forms--although these data are 
sufficiently reliable for the purposes of initiating a bankruptcy case. 
Several factors create challenges to improving the bankruptcy data 
system. Most notably, facilitating public access to data in bankruptcy 
files--which can contain highly personal information--can raise privacy 
and security concerns. The federal judiciary also has noted that 
collection of demographic or other additional data is not its mission 
and would require added resources; further, the judicial process may 
not be well suited to capturing certain types of information, such as 
the reasons a consumer files for bankruptcy. Bankruptcy case files are 
publicly accessible, but not in a format that readily allows for 
compilation and analysis. The U.S. Party/Case Index was designed to 
allow nationwide searches of individual bankruptcy cases, and although 
it serves that function, its search parameters are limited and the 
results do not include much of the data held by the system. 

Limited Information Is Available on Some Characteristics of Consumer 
Bankruptcies: 

The judiciary reports statistics on the number of bankruptcy filings 
and collects a variety of financial information from individual filers 
in the official bankruptcy forms. However, relatively little 
information is available on the characteristics of people who file for 
bankruptcy, the factors that contributed to their bankruptcy filings, 
or the outcomes of their cases. 

Bankruptcy Statistics: 

AOUSC generates monthly, quarterly, and annual statistics on the 
numbers of bankruptcy filings. Prior to 2008, these tables were the 
only statistics the judiciary released on bankruptcies. (The new 
statistics required under the Bankruptcy Reform Act are discussed later 
in this report.) The filing statistics include tables that show the 
number of bankruptcy cases filed for either a 12-, 3-, or 1-month 
period, broken down by several factors: 

* status of case (commenced, terminated, and pending), 

* circumstance of filing (voluntary or involuntary), 

* nature of debt (including business or nonbusiness), 

* joint petitions, 

* median time interval from filing the petition to disposition, and: 

* adversary proceedings (commenced, terminated, and pending). 

Most of these tables include the data broken out by each judicial 
district as well as by bankruptcy chapter; some of the tables include 
statistics by individual bankruptcy court or county. AOUSC strives to 
publicly release the quarterly and annual statistics 2 to 3 months 
after the close of each quarter. Certain additional statistics used 
internally are not publicly released, such as the number of cases 
assigned to each judge and numbers of trials in bankruptcy courts. 

The judiciary generates these statistics largely to meet its statutory 
requirements to produce statistical reports for Congress and the public 
on the business transacted by the bankruptcy courts. Data on numbers of 
bankruptcy filings help the judiciary determine the need for resources 
to operate the courts, forecast future needs, and formulate the 
judiciary's congressional budget requests. For example, data on the 
number of cases opened (or filed) are one of the principal bases for 
determining the number of bankruptcy judges that may be needed. The 
bankruptcy statistics also receive wide attention outside of the 
judiciary. For example, AOUSC's statistical tables on the numbers of 
bankruptcy filings are used by financial analysts and other government 
agencies as a lagging economic indicator and reported by the mass media 
as a measure of the financial health of American consumers. 

Case Information: 

The files of individual bankruptcy cases--which are public documents-- 
contain significant amounts of information. For example, the voluntary 
petition used to initiate a consumer bankruptcy filing includes, among 
other things, the debtor's name and address, the estimated number of 
creditors, and the estimated amount of the debtor's assets and 
liabilities. Other schedules and forms require the debtor to provide 
information on, among other things: real property (real estate), 
personal property (such as cash, stocks, bonds, and household items), 
secured debts (such as mortgages and liens), unsecured debts (such as 
credit card debt and tax obligations), monthly income, and itemized 
monthly expenses. 

Bankruptcy case files also include other information filed with the 
courts. For example, the file may contain a Chapter 13 repayment plan, 
which identifies specific creditors and the amount of their claims, the 
monthly repayment amount, the interest rate that the debtor and 
creditors have agreed on, and the duration of the repayment plan. 
Similarly, case files may include reaffirmation agreements, including 
the amount and characteristics of debt being reaffirmed.[Footnote 7] 
Bankruptcy case files also include final reports submitted by the 
private trustees that can include information on disbursements and 
repayments to creditors. Finally, the file includes the case docket 
that serves as a chronological record of all significant events that 
occur during the case, such as motions, applications, and court orders. 

Although the official bankruptcy forms and case files include this 
information, they nonetheless are limited in providing certain key 
information that would help inform the nature and causes of consumer 
bankruptcy. Bankruptcy files do not contain basic characteristics about 
the debtor or the nature of the debtor's circumstances, such as the 
following: 

* Demographic information. Filers are not asked to provide their age, 
gender, marital status, education, occupation, race, or ethnicity in 
the bankruptcy petition and thus this information typically is not 
available from the case file. 

* Reasons for the bankruptcy. The official bankruptcy forms do not ask 
for the factors that led to the bankruptcy filing, such as job loss or 
divorce. The forms also do not collect information on the specific 
source of debt, such as medical bills, gambling losses, or damages from 
fire, theft, or flood. 

* Postbankruptcy outcomes. No component of the bankruptcy system 
collects information once a discharge has been granted and a case is 
closed. As a result, the bankruptcy system does not have data on such 
things as the financial status of debtors subsequent to the discharge 
of their debt, including the accumulation of new debt. 

As a result, the bankruptcy system provides limited information on who 
is filing for bankruptcy, why they are filing, and the long-term 
results of these bankruptcies--all of which can be important in 
identifying economic and social trends and understanding the impact 
that bankruptcy may have on families and communities. While this 
information may be important for public policy purposes, it is not 
collected as part of the bankruptcy process primarily because it is not 
information needed by the judiciary or Trustee Program to operate the 
bankruptcy system. 

To a limited extent, some nongovernmental entities collect information 
on consumer bankruptcies. For example, since 1981, the Consumer 
Bankruptcy Project, an ongoing research effort involving several 
universities, has gathered information from bankruptcy filers through 
case file reviews, surveys, and interviews on such things as 
educational levels, housing, physical health, employment, and reasons 
for filing for bankruptcy.[Footnote 8] The project has produced 
empirical studies of the demographic and financial characteristics of 
consumer bankruptcy debtors based on samples of Chapter 7 and Chapter 
13 petitions filed in 1981, 1991, 2001, and 2007. In addition, the 
National Data Center, a nonprofit organization, collects case and 
claims information directly from Chapter 13 trustees, which it 
consolidates into a database that is used by parties of interest, such 
as creditors, trustees, and debtors and their attorneys. 

In the years leading to the enactment of the Bankruptcy Reform Act in 
2005, there was significant debate among policymakers, creditors, 
consumer advocates, and other stakeholders on the factors contributing 
to the rising rate of consumer bankruptcy, including the relative roles 
of illness, joblessness, and divorce. While some studies, such as those 
produced by the Consumer Bankruptcy Project, have examined these 
issues, it was widely acknowledged that not enough data were available 
from the bankruptcy system and other sources to help fully inform these 
discussions. Similarly, in recent work that GAO has conducted examining 
the bankruptcy system, we have found that limitations in available data 
have hindered our ability to answer questions of interest to 
congressional requesters. For example, in October 2007, we reported 
that information available from the bankruptcy system was not 
sufficient to allow us to evaluate the impact of the Bankruptcy Reform 
Act on child support obligations.[Footnote 9] Further, in our December 
2007 report on debtors' use of reaffirmation agreements, we examined a 
representative sample of bankruptcy files in five bankruptcy courts, 
but were unable to do a nationally representative sample because the 
necessary data needed to be manually extracted from individual 
databases at the district level.[Footnote 10] 

Some Bankruptcy Data Are Not Always Accurate: 

There has been long-standing recognition that much of the data in the 
bankruptcy system may not be accurate, largely because much of the data 
is self-reported by debtors in the official bankruptcy forms. For 
example: 

* The report of the National Bankruptcy Review Commission noted 
persistent problems with the accuracy of bankruptcy data, pointing out 
that data extracted from the debtors' petitions and reported to AOUSC 
often are inconsistent with other information contained in the same 
debtors' schedules and statements of financial affairs.[Footnote 11] 

* The Trustee Program's audits of Chapter 7 and Chapter 13 debtors in 
fiscal year 2007 identified at least one material misstatement of 
income, expenditures, or assets in 30 percent of the cases for which 
audit reports were filed.[Footnote 12] 

* A 1999 study of the consistency and completeness of 200 randomly 
selected consumer bankruptcy cases in a Michigan district found "errors 
and problems" in 99 percent of the cases, with an average of three 
mistakes per case.[Footnote 13] A 2002 study of 103 consumer asset 
cases in the same district found that 41 percent of cases had assets 
that had not been disclosed by debtors in their initial bankruptcy 
papers.[Footnote 14] 

A key reason why information in bankruptcy cases may be inaccurate is 
that it is largely self-reported by the debtor. Filers and bankruptcy 
petition preparers must attest, under penalty of perjury, that the 
information they provide is correct and true. Nonetheless, as seen 
above, ample evidence indicates that debtors filing a bankruptcy 
petition do not always accurately estimate, for example, their debts, 
the value of their assets, and other key information. The unreliability 
of self-reported data in bankruptcy files is a result of several 
factors, according to AOUSC staff, private trustees, and academic 
experts we spoke with. First, individuals entering bankruptcy often 
have not kept good financial records, a fact that may hinder their 
ability to provide accurate information. Second, some portion of 
debtors file for bankruptcy without the assistance of an attorney and 
their unfamiliarity with the process increases the likelihood they will 
make errors on the forms. Third, there is little incentive for any 
party to ensure that certain information is precisely accurate if that 
information will not affect the outcome of the case. For example, in 
Chapter 7 cases that involve no eligible assets to be distributed to 
creditors, calculating the precise amount of a debtor's liabilities 
makes little difference since all eligible debt will be discharged 
anyway. As such, the impact of data in bankruptcy forms that is less 
than fully accurate varies depending on how the information is being 
used. The data may be problematic for the purposes of research or the 
collection of statistics, but are still sufficiently reliable for the 
purposes of initiating a bankruptcy case. 

In every consumer bankruptcy case, the private trustee submits to the 
Trustee Program a "final report" that details the administration of the 
estate. The Trustee Program reviews these reports and they are then 
filed with the court.[Footnote 15] The information in these final 
reports is generally more accurate than information in the petition and 
supporting forms, for two primary reasons. First, the trustee has 
certain responsibilities to review and verify some of the financial 
information submitted by the debtor. Second, the final report is 
generated near the end of the bankruptcy process, when more accurate 
information may be available, whereas the petition is submitted by the 
debtor at the beginning of the process. At the same time, the scope of 
the information contained in the trustee final reports is limited-- 
largely to data related to disbursements and repayments to creditors. 

Some parties have expressed concerns about the measurement of consumer 
versus business bankruptcies. The Bankruptcy Code defines consumer 
(nonbusiness) debt as that incurred by an individual primarily for a 
personal, family, or household purpose.[Footnote 16] If the debtor is a 
corporation or partnership, or if debt related to the operation of a 
business predominates, AOUSC defines the nature of the debt as 
business. Debtors self-report in the bankruptcy petition whether their 
debts are primarily consumer or business debts, but such a 
determination can be ambiguous. For example, certain debtors--such as 
entrepreneurs, small businesses, self-employed individuals, and 
independent contractors--may have difficulty determining the 
predominant nature of their debts if their personal and business 
liabilities are closely intertwined. In the 2005 study, "The Myth of 
the Disappearing Business Bankruptcy," the authors concluded that AOUSC 
statistics significantly undercount the number of business 
bankruptcies, which they said may lead policymakers and others to draw 
inappropriate conclusions about trends in business successes and 
failures and other important policy issues.[Footnote 17] AOUSC 
officials told us that the appropriate definition of whether a debtor 
is a consumer or a business is open to question, but that the 
classification used in their statistics--the predominant nature of the 
debt as reported by the debtor--has a statutory basis. 

Various Factors Affect the Ability to Expand the Data Available from 
the Bankruptcy System: 

The concerns that exist today about the data available from the 
bankruptcy system have existed for decades. For example, interest in 
more detailed, accurate, and reliable information was raised by both 
the 1973 and 1997 federal bankruptcy commissions. While opportunities 
may exist to further expand and improve the data available from the 
bankruptcy system, several factors create challenges to making such 
improvements. 

* Public accessibility must balance privacy and security concerns. 
Bankruptcy files can contain personal information such as tax and 
financial data or documents from creditors that may reveal such things 
as a filer's medical circumstances or gambling history. In the past, 
accessing bankruptcy records required physically retrieving files from 
a courthouse. However, with the development of the Internet, personal 
information can be readily and quickly accessed from anywhere in the 
world, raising privacy concerns. Further, some consumer groups, 
bankruptcy attorneys, and representatives of the judiciary have raised 
concerns that increasing electronic access to bankruptcy data, such as 
through data-enabled forms, could facilitate identity theft or the use 
of personal data to target bankruptcy filers for potentially 
exploitative financial products or services. In 2003 and 2007, 
bankruptcy rules were amended to restrict the publicly accessible 
personal information in bankruptcy files.[Footnote 18] For example, 
only the last four digits of a Social Security number are required in 
the bankruptcy petition and bankruptcy filers may redact personal 
identifiers, such as dates of birth and names of minors, from 
electronic or paper filings made with the court.[Footnote 19] AOUSC 
officials told us that if substantial additional bankruptcy information 
were to be made publicly available, the privacy and security rules 
themselves might have to be reconsidered to provide additional 
protections. 

* Collection of demographic and other additional data is not the 
judiciary's mission. The basic mission of the federal courts is to 
interpret and apply the law to resolve disputes. AOUSC officials told 
us that while the bankruptcy courts have certain statutory requirements 
to maintain an accurate public record of case proceedings, they have no 
such requirements, or any need, to collect demographic or financial 
data that are unrelated to the operations of the courts. As such, the 
judiciary historically has been reluctant to devote resources to 
collecting data solely for research and policy purposes. 

* Resources are limited. Improving the judiciary's data collection and 
statistical infrastructure can require additional resources for such 
things as equipment, staff, and training. AOUSC officials noted that 
their current resources for information technology, data collection, 
and statistical reporting were limited and would not be able to readily 
accommodate additional responsibilities. 

* Local courts' autonomy can hinder centralized data collection. All 
bankruptcy courts are governed by certain national rules and 
requirements and must report certain standard data to AOUSC. However, 
individual courts also have a significant degree of autonomy to develop 
their own local rules and requirements, and local practices and 
procedures vary. Further, each individual district manages its own data 
systems and can choose to track additional data according to its 
preferences. The traditional autonomy of the 90 individual bankruptcy 
districts can create challenges for AOUSC in ensuring that processes 
are followed uniformly and data are collected in a consistent fashion. 

* The bankruptcy process is not well-suited to collecting certain types 
of information. The factors that result in a bankruptcy--a key public 
policy issue--are inherently hard to capture in a bankruptcy form. 
Bankruptcy petitions include a list of creditors but do not necessarily 
provide insight as to the source of the debt--for example, credit card 
debt may derive from medical expenses or from a costly vacation. 
Moreover, bankruptcy often results from multiple factors that can be 
difficult to isolate (e.g., both unemployment and poor financial 
management may be factors). Further, because the courts' formal role 
generally ends once a case is closed, the courts are not in a position 
to collect data about the long-term impact of bankruptcies. As a result 
of these factors, the judicial process may not be well-suited to 
collecting certain key information, which may instead best be obtained, 
for example, by private parties conducting one-on-one interviews with 
debtors. 

* Collecting demographic data poses concerns. Key demographic 
information about bankruptcy filers--such as gender, age, and race--is 
of interest to policymakers and others, but may not be appropriate for 
inclusion in official bankruptcy forms. Some worry, for example, that 
formalized collection of this information could introduce the 
appearance of bias or facilitate discrimination. 

Bankruptcy Data Are Not Always Easily or Fully Accessible: 

The federal judiciary uses several major data systems to collect, 
manage, and disseminate information about bankruptcies.[Footnote 20] 

* The Case Management/Electronic Case Files (CM/ECF) system is used by 
nearly all U.S. district, bankruptcy, and appellate courts to manage 
and track cases. AOUSC requires all bankruptcy courts to maintain 
certain uniform pieces of information in CM/ECF--including debtor name 
and case number, county, filing date, and disposition of the case--but 
individual bankruptcy courts can customize the system to facilitate its 
functions under local rules and local practices and procedures. CM/ECF 
permits bankruptcy participants, such as attorneys and trustees, to 
electronically file documents with the court.[Footnote 21] 

* The U.S. Party/Case Index is a nationwide locator for U.S. district, 
bankruptcy, and appellate courts, which can be used by the public to 
search for individual case filings, including bankruptcy filings. 
Certain bankruptcy data are obtained from the courts' CM/ECF systems on 
a daily basis, and the index allows searches based on case identifiers 
such as a filer's name or Social Security number.[Footnote 22] The 
index can be used to search all courts nationwide, or to search by 
judicial circuit, state, or district. Bankruptcy court staff use the 
index to determine if an individual has filed a bankruptcy petition in 
other judicial districts. Other parties, such as attorneys and 
creditors, use the system to determine if an individual is party to any 
judicial case. 

* The Public Access to Court Electronic Records (PACER) system serves 
as the portal through which the public can access, via the Internet, 
individual courts' CM/ECF systems and the U.S. Party/Case Index. For 
any given bankruptcy case, a user can retrieve the docket sheet and 
hyperlinks to nearly all of the case's documents, including the 
petition and supporting forms and schedules. Prior to about 2001, 
parties interested in obtaining bankruptcy files typically needed to 
physically visit the court where a debtor filed a petition and request 
hard copies of documents associated with the case. In addition to case 
documents, PACER also allows a user to retrieve case-related data from 
CM/ECF. Users of PACER are charged 8 cents a page. 

At the Trustee Program, the Automated Case Management System functions 
as the internal case management system used by the agency to carry out 
its responsibilities, including supervising the administration of cases 
and private trustees. The system, which is not available to the public, 
includes information on such things as case status and the names of 
attorneys and the trustee assigned, as well as a history of case 
hearings, reports, pleadings, appointments, and fees. Some of the 
information in the system is obtained from individual courts' CM/ECF 
systems, while other information is entered by the Trustee Program 
itself. 

Some nongovernmental entities also maintain information on consumer 
bankruptcies that has been obtained from the courts. For example, 
Automated Access to Court Electronic Records, a private company, uses 
PACER to extract information from individual courts' CM/ECF systems 
and, for a fee, repackages the data to meet the needs of lenders, 
attorneys, researchers, and other clients. 

Information in Case Files Is Not Easily Extracted: 

The bankruptcy petitions, schedules, and other documents available via 
PACER are provided in a PDF format that is essentially a snapshot image 
of the document. Thus, the data cannot easily be electronically 
extracted and transferred to another format for compilation and 
analysis. As a result, examining the data contained in multiple 
bankruptcy cases can be time consuming and costly. It involves--for 
each individual bankruptcy case--locating and accessing the electronic 
case file in the relevant court's CM/ECF system; identifying the 
document that contains the desired pieces of information; and manually 
extracting the data into a database or spreadsheet format. PACER's fee 
of 8 cents per page also can inhibit the collection of information from 
a large number of cases.[Footnote 23] 

To facilitate the use of the data held in bankruptcy files, the 
judiciary and the Trustee Program have been exploring for several years 
the use of "data-enabled" bankruptcy forms. Data-enabled forms contain 
embedded data tags that are invisible to the user. The tags allow a 
computer system to automatically extract the tagged data, as well as 
categorize it so that the information can be compared and analyzed. In 
2004, AOUSC and the Trustee Program began discussions on using data- 
enabled forms for bankruptcy filing documents, which would allow the 
data in those documents to be more easily extracted. In September 2006, 
the Trustee Program formally requested that the judiciary mandate data- 
enabled forms through a required technical standard for certain 
documents filed electronically in the bankruptcy courts. In March 2008, 
the judiciary declined to mandate data-enabled forms, but said it was 
examining alternatives that would still facilitate automated case 
review.[Footnote 24] 

The Trustee Program and other parties--including some judges, 
researchers, and private trustees--have said that the use of data- 
enabled forms would be beneficial for several reasons.[Footnote 25] 
First, data-enabled forms would greatly reduce the number of hours the 
Trustee Program and other parties devote to manual data entry. Second, 
it would allow for more efficient collection of bankruptcy data, 
compilation of national bankruptcy statistics, and analysis of the 
bankruptcy system. Third, they say, data-enabled forms would allow the 
Trustee Program to conduct its work more effectively and efficiently. 
For example, a study prepared for the National Institute of Justice-- 
the research, development, and evaluation agency of the Department of 
Justice--concluded that implementing data-enabled forms would be an 
important step toward improving the Trustee Program's ability to fight 
bankruptcy fraud and abuse by facilitating statistical fraud 
detection.[Footnote 26] Similarly, the Trustee Program has noted that 
data-enabled forms would allow it to more efficiently administer the 
"means test" by allowing it to automatically sort cases by whether 
debtors are above or below the applicable state median income.[Footnote 
27] 

The judiciary has raised concerns about implementing data-enabled 
bankruptcy forms. AOUSC officials have said the technology for data- 
enabled forms must be compatible with the current information system 
and the electronic and hard copy documents should be identical to 
comply with rules of court procedures and record-keeping standards. 
Further, the judiciary, certain attorneys, and software vendors have 
raised potential privacy and security concerns--for example, that data- 
enabled forms could make it easier to collect personal information and 
use it for marketing or undesirable purposes. Finally, the judiciary 
also has expressed concerns that developing and implementing the forms 
would impose higher costs on the judiciary, attorneys, and debtors and 
potentially could limit access to bankruptcy court. For example, pro se 
debtors may not have access to the data-enabled bankruptcy software 
needed to file a petition. 

In January 2008, the Judicial Conference's Advisory Committee on 
Bankruptcy Rules established the Bankruptcy Forms Modernization Project 
to review and revise the official bankruptcy forms. The project, which 
is expected to last 5 to 7 years, is evaluating technologies that the 
judiciary could adopt to facilitate the collection, analysis, and 
dissemination of information collected via the forms. AOUSC officials 
told us that while the project's ultimate recommendations will give 
priority to the requirements of the judiciary, it also will take into 
consideration the views and needs of external stakeholders, such as 
policymakers and researchers. 

Broader Access to Existing Nationwide Data Could Be Beneficial: 

Information about bankruptcy cases can be accessed by the public from 
individual courts' CM/ECF data systems. For example, a user can search 
for cases filed in a specific district within a certain time frame and 
then generate a data file that contains up-to-date information on 
cases--such as date and chapter of filing, whether the case involves 
assets, and the disposition of the case. There is no mechanism to 
conduct a single nationwide search across all 90 districts' CM/ECF 
systems. Instead, to conduct a nationwide search, a user must replicate 
the search in each district's system. As a result, conducting large- 
scale studies of bankruptcy cases nationwide can be difficult since the 
CM/ECF systems cannot readily be used to generate a national sample of 
cases. 

The U.S. Party/Case Index, by contrast, can be used to search 
nationwide for individual bankruptcy cases. To conduct a search, a 
name, Social Security number, tax identification number, or case number 
must be entered. However, the index does not allow a user to search 
using the other data elements it maintains, such as chapter of filing 
or disposition of the case. Further, not all of the data maintained in 
the index are made publicly available in the search results. When a 
search is conducted in the U.S. Party/Case Index, the results for a 
given bankruptcy case include the name of the filer, the case number, 
and the chapter filed. However, the results do not show other case 
information held in the system, such as key dates and the disposition 
of the case.[Footnote 28] In addition, presently the U.S. Party/Case 
Index provides the results of its searches as a text file rather than a 
data set. As a result, the output the system provides cannot readily be 
imported into a database for further sorting and analysis. 

A range of bankruptcy stakeholders, including some judges, researchers, 
and Trustee Program staff, have suggested improving public access to 
data that already exist in the judiciary's data systems. One possible 
mechanism for doing so might be expanding the search and output 
capability of the U.S. Party/Case Index, which could enhance the 
ability to assess and understand the characteristics and outcomes of 
consumer bankruptcies. For example, it could facilitate the ability to 
draw a nationwide sample of cases, which is useful in gathering and 
analyzing real-time information that is representative of the entire 
country rather than specific districts. It also could facilitate 
further analysis of certain case dispositions--for example, one could 
identify Chapter 13 cases that were dismissed for failure to make 
payments. Moreover, expanding public access to data held in the system 
would be consistent with recommendations made by the 1997 National 
Bankruptcy Review Commission and section 604 of the Bankruptcy Reform 
Act (discussed later in this report), both of which called for a 
national policy of releasing the maximum amount of bankruptcy data in a 
usable electronic form, albeit subject to appropriate privacy 
safeguards. 

Further examination would be needed before it could be determined 
whether expansion of the U.S. Party/Case Index would indeed be a 
practicable and appropriate mechanism for facilitating public access to 
real-time bankruptcy data. AOUSC staff noted that the index was 
designed as a basic search mechanism for identifying if certain 
individuals are parties to cases and was not intended to serve as a 
tool for providing a range of data on individual cases. The staff told 
us that expanding the output or search capability of the system would 
be technically feasible, although it would involve network, database, 
and other infrastructure costs. Moreover, as noted earlier, any measure 
to facilitate the availability of bankruptcy data--much of which is 
personal and sensitive--also would need to address appropriate privacy 
and security protections. 

The Inter-University Consortium for Political and Social Research 
provides free public access via its Web site to case-level data on 
consumer bankruptcies provided to it by the judiciary.[Footnote 29] 
Data sets include numerous variables, such as case number, chapter, 
assets, liabilities, and case disposition. However, one researcher 
noted that this resource is of limited use because, among other things, 
the data are not always up to date and can be inconsistent from year to 
year. In addition, variables for such things as assets and liabilities 
are provided as ranges (e.g., $0 to $50,000) rather than as specific 
values, limiting their usefulness. AOUSC officials told us that 
implementation of the Bankruptcy Reform Act prevented them from 
providing timely data to the Inter-University Consortium over the past 
few years, but that they recently provided the consortium with 
bankruptcy data through fiscal year 2007. They also noted that any 
inconsistencies in the data are the result of changes in the law and 
the data extracted. These led to changes in data fields and codes in 
those fields, and the code translations are provided to the Consortium 
with the data sets. 

Bankruptcy Reform Act's Data Requirements Provide Some Benefits, but 
Several Factors Limit the Usefulness of the Data: 

The Bankruptcy Reform Act required AOUSC to compile and report certain 
statistics on consumer bankruptcy cases on an annual basis, and it 
required the Trustee Program to require uniform forms for the final 
reports submitted by private trustees at the end of each bankruptcy 
case. These new data requirements will provide some additional 
information that may be useful in understanding the characteristics and 
outcomes of consumer bankruptcy cases and how such cases vary across 
different regions of the country. However, the usefulness of these data 
is limited for several reasons. For example, the annual statistics are 
aggregated, which limits what the information conveys, and the scope of 
what is provided by some of the specific data elements is relatively 
narrow. Despite these limitations, many bankruptcy stakeholders believe 
it would be beneficial for the judiciary to publicly release the raw, 
case-level data underlying the statistics required by the Bankruptcy 
Reform Act. 

The Bankruptcy Reform Act Requires Additional Bankruptcy Statistics and 
Uniform Final Reports: 

The Bankruptcy Reform Act included new requirements that were intended 
to improve the availability of information about consumer bankruptcies. 
The data provisions of the act stemmed from the long-standing concern 
among policymakers about the need for more detailed and reliable 
information about the bankruptcy system.[Footnote 30] In large part, 
the provisions reflected recommendations and specific data needs 
identified by the 1997 National Bankruptcy Review Commission.[Footnote 
31] 

Required Annual Statistics: 

The Bankruptcy Reform Act requires each bankruptcy court to collect 
certain statistics for Chapter 7, Chapter 11, and Chapter 13 bankruptcy 
cases filed by individuals with primarily consumer debts.[Footnote 32] 
The act also requires the director of AOUSC to prescribe a standardized 
format for these statistics, compile the statistics collected by the 
courts, make them publicly available, and submit to Congress a report 
and analysis of this information no later than July 1, 2008, and 
annually thereafter. The act required each of these data elements to be 
reported in the aggregate and by district, as well as itemized by 
chapter. As shown in table 1, the required statistics provide 
information about a variety of characteristics and outcomes of consumer 
bankruptcy cases. On June 23, 2008, AOUSC issued its first annual 
statistical report to Congress, meeting its statutory deadline. The 
report comprised a summary of findings, a discussion of the methodology 
of data collection and the limitations of the data, and 21 tables 
presenting the required statistics, itemized by chapter and presented 
in the aggregate and for each district. 

Table 1: Summary of Annual Statistics Required by 28 U.S.C. section 159 
(as added by section 601 of the Bankruptcy Reform Act) for Chapter 7, 
Chapter 11, and Chapter 13 Consumer Bankruptcy Cases: 

For Chapters 7, 11, and 13: 

* Total assets (by real and personal property). 

* Total liabilities (by secured claims, unsecured priority claims, and 
unsecured nonpriority claims). 

* Current monthly income. 

* Average income. 

* Average expenses. 

* Aggregate amount of debt discharged. 

* Average time between cases filed and closed. 

* Number of cases in which creditors were fined for misconduct and any 
amount of punitive damages awarded. 

* Number of cases in which sanctions under Bankruptcy Rule 9011 were 
imposed against the debtor's attorney or any damages awarded under such 
rule. 

Number of cases in which a reaffirmation agreement was filed. 

* Total number of reaffirmation agreements filed. 

* Number of cases with reaffirmation agreements filed in which the 
debtor was not represented by an attorney. 

* Number of cases in which a reaffirmation agreement was approved by 
the court. 

For Chapter 13 cases only, the number of: 

* Cases in which final order contained determination that the value of 
the collateral was less than the claim. 

* Final orders entered determining the value of collateral securing a 
claim. 

* Cases dismissed. 

* Cases dismissed for failure to make payments under the repayment 
plan. 

* Cases refiled after dismissal. 

* Cases in which plan was completed and number of modifications made to 
the plan prior to completion. 

* Cases in which the debtor filed another case during the 6-year period 
preceding the filing. 

Source: Bankruptcy Reform Act. 

[End of table] 

The data systems the judiciary had in place when the Bankruptcy Reform 
Act was enacted did not capture all of the new data required for 
reporting purposes, and those data systems were not capable of 
collecting and reporting all such data. The judiciary undertook several 
major initiatives to meet its new reporting responsibilities under the 
act. For example, 

* the official bankruptcy forms were modified to capture certain new 
data elements needed to generate the new statistics; 

* new procedures were developed for bankruptcy courts to collect the 
required data; 

* the electronic case management system, CM/ECF, was modified to 
capture new data elements; 

* bankruptcy court staff received training on the modifications to the 
data systems and procedures; and: 

* a new statistical infrastructure was built to collect, store, and 
produce the new statistics, and the new statistical tables were 
designed and developed. 

AOUSC officials said they struggled to implement these changes using 
existing funding and staffing resources, noting that the judiciary 
received no additional funding from Congress to meet the new 
statistical requirements. They said that many other projects had to be 
deferred as personnel and resources were diverted to meet the 
Bankruptcy Reform Act's data requirements. As of December 2007, the 
judiciary estimated it had spent $2.8 million to implement its 
statistical and reporting responsibilities under the act.[Footnote 33] 

Uniform Final Reports: 

The Bankruptcy Reform Act required the Attorney General--who delegated 
this responsibility to the Trustee Program--to issue, within a 
reasonable amount of time, rules requiring uniform forms for the final 
reports that private trustees submit for each Chapter 7, Chapter 12, 
and Chapter 13 case.[Footnote 34] The act indicated that the forms 
should be designed to facilitate compilation of data and maximum 
possible public access, both physical and electronic. It also indicated 
that in developing the forms, the Attorney General shall strike a 
balance between the need for public information, undue burden on the 
private trustees who must generate the forms, and privacy concerns. 
[Footnote 35] 

Although trustees filed final reports prior to the Bankruptcy Reform 
Act to document their administration of cases, there were more than 100 
different versions of the reporting forms in use across the country, 
according to the Trustee Program. Under the act, a uniform set of forms 
must be used, and these forms must include certain prescribed data 
elements, as shown in table 2. Some of these data elements had already 
been provided in at least some trustees' final reports, while others 
are new. 

Table 2: Summary of Data Required by 28 U.S.C. section 589b (as added 
by section 602 of the Bankruptcy Reform Act) to be Included in Uniform 
Final Reports for Cases under Chapter 7, Chapter 12, and Chapter 13: 

For Chapters 7, 12, and 13: 

* Length of time the case was pending. 

* Assets abandoned. 

* Assets exempted. 

* Receipts and disbursements of the estate. 

* Expenses of administration. 

* Claims asserted. 

* Claims allowed. 

* Distributions to claimants and claims discharged without payment. 

For Chapter 12 and 13 cases only:. 

* Dates of confirmation, modifications, and defaults in performance of 
the plan. 

Source: Bankruptcy Reform Act. 

[End of table] 

In 2005, the Trustee Program began developing drafts of the uniform 
final report forms after reviewing samples of the forms that were 
already being used in various bankruptcy courts. The program sought 
feedback on the draft forms from professional associations representing 
Chapter 7 and Chapter 13 private trustees and from vendors of software 
used by these trustees. On February 4, 2008, the Trustee Program issued 
a notice of proposed rulemaking and publicly released drafts of the 
uniform forms for Chapter 7 and Chapter 13 trustees' final reports. 
[Footnote 36] The Trustee Program received approximately 70 comments 
from private trustees, attorneys, and others on the proposed rule and 
draft forms. On October 7, 2008, the program issued a final rule that 
will become effective on April 1, 2009, at which time the trustees will 
be required to use the uniform forms for submitting their final reports 
for each consumer bankruptcy case.[Footnote 37] The final rule 
incorporated changes that reduce the burden on private trustees. For 
example, final reports for Chapter 7 no-asset cases will not be 
separate documents, but rather can be completed electronically as a 
virtual entry form in the court's docket. 

Electronic Availability of Data: 

Section 604 of the act does not impose any requirements but rather 
expresses the "sense of Congress" that: 

* the national policy of the United States should be that all public 
record data maintained by bankruptcy clerks in electronic form should 
be released in bulk to the public in a usable electronic form, 

* the bankruptcy data system should use a single set of data 
definitions and forms to collect data nationwide, and: 

* data for each bankruptcy case should be "aggregated in the same 
electronic record." 

The statutory language reflects almost verbatim two recommendations of 
the 1997 report of the National Bankruptcy Review Commission. That 
report noted that the wealth of data generated by the bankruptcy system 
should be available for systematic study by making it available to the 
public electronically, to the extent practical. Bankruptcy stakeholders 
have expressed varying interpretations of section 604. The Judicial 
Conference's Committee on the Administration of the Bankruptcy System 
noted in a March 2008 report that the judiciary already addresses many 
of the issues raised in these provisions--such as by providing public 
access to court electronic records through PACER. At the same time, two 
academic researchers we spoke with noted that case files available 
through PACER files are largely PDF image files and expressed the 
opinion that in accordance with section 604, the judiciary should 
expedite efforts to make case-level data accessible in an extractable 
database format that could be used more readily for compilation and 
analysis. 

The New Data Requirements Will Provide Some Additional Information 
about Consumer Bankruptcies: 

The new annual statistics and the uniform final reports required under 
the Bankruptcy Reform Act will provide some additional information that 
may be useful in understanding the characteristics of consumer 
bankruptcy cases and differences among such cases across the country. 

Annual Statistics: 

The new annual statistics required by the Bankruptcy Reform Act provide 
Congress, the judiciary, the Trustee Program, and the public with a 
variety of new information on certain characteristics and outcomes of 
consumer bankruptcy cases. Prior to 2008, the bankruptcy statistics 
produced by the judiciary consisted primarily of information related to 
the numbers of filings, as noted earlier. The new statistics provide, 
for the first time, comprehensive statistics on certain aspects of 
consumer bankruptcies and on the debtors themselves that may provide a 
better understanding of the trends in, basis for, and impact of 
bankruptcy filings. 

While these data have significant limitations, some bankruptcy 
stakeholders identified specific ways these new statistics might be 
revealing or useful. For example, Trustee Program staff and two judges 
we spoke with said that the statistics could be useful for identifying 
differences across districts or regions of the country in the outcomes 
of cases or the characteristics of bankruptcy filers, such as their 
assets, liabilities, and income. In addition, an academic researcher 
noted that the statistics could reveal differences in the legal process 
or local legal culture in different districts. Similarly, Trustee 
Program staff noted that certain data on Chapter 13 case outcomes--such 
as the number of repeat filers, cases dismissed, and cases in which a 
repayment plan was completed--could provide practical information on 
how Chapter 13 practices differ across the country. 

The new statistics also will provide some useful information on the 
average debtor's financial circumstances. For example, one researcher 
noted that the statistics on median debtor income and expenses could 
provide useful information about the profile of the typical filer. 
Another researcher told us that the new statistics could be used to 
calculate debt-to-income ratios and track changes in these ratios over 
time to examine changes in the typical profile of debtors. Further, 
comparisons of debtors' current monthly incomes with their average 
incomes in the previous 6 months could provide a better understanding 
of how their financial situations changed in the period leading up to 
the bankruptcy filing. 

Some Trustee Program officials, judges, and bankruptcy court clerks 
said that some of the new data also may be beneficial in conducting 
their internal operations. For example, Trustee Program officials said 
these data could potentially help assess the efficiency of its regional 
offices. In addition, the four bankruptcy judges we spoke with said 
that the statistics on the outcomes of Chapter 13 cases will provide 
useful information for their administration of these types of cases. 

Uniform Final Reports: 

The Trustee Program will require trustees filing the uniform final 
reports for Chapter 13 cases and for Chapter 7 asset cases to use a 
"smart form" that is data enabled.[Footnote 38] As discussed earlier, 
data entered into these data-enabled forms are "tagged," and these tags 
are then available for extraction and searching capability. This data- 
enabled format will facilitate compilation and analysis of the 
information the forms include, and it aligns with the sense of Congress 
expressed in section 604 that bankruptcy data should be released in a 
usable electronic form. Staff from a Trustee Program regional office 
told us that the data-enabled format would make it easier for regional 
staff to compile the distribution statistics on receipts and 
disbursements that they already generate for internal program use. The 
format also might allow easy extraction of information from large 
numbers of forms for research purposes that could inform policy making. 
Some bankruptcy researchers we spoke with told us they had not used 
trustees' final reports in the past but noted that the new data-enabled 
format of the trustees' reports would make the reports a potential 
research tool. 

The use of a single set of standard forms should improve the 
consistency of the data included in the reports. According to Trustee 
Program staff, the uniform forms should facilitate any analysis that 
may be conducted, particularly across districts. The Trustee Program 
staff said that the new final reports also may aid their oversight of 
private trustees. For example, comparisons of such things as 
administrative expenses and distributions to creditors could be used to 
evaluate the efficiency and effectiveness of trustees. 

Because the act requires the uniform final reports to include specific 
new data elements, the reports will provide additional information 
about consumer bankruptcy cases--particularly for Chapter 7 no-asset 
cases, whose final reports previously contained little to no data. In 
its rule, the Trustee Program noted that the new reports will assist 
Congress in compiling data to accurately analyze bankruptcy trends when 
making policy decisions. Trustee Program staff we spoke with cited some 
specific ways the data potentially could be used to inform policy 
making. For example, the new final reports will include data on the 
amount of "assets exempted"--that is, those assets that are shielded 
from unsecured creditors by fully or partially exempting them from the 
property of the bankruptcy estate. This information could be used with 
data on "distributions to claimants" to show the effects of various 
exemption rules on the availability of funds to make payments to 
creditors. (In some states, bankruptcy filers have the option to use 
federal or state exemption rules.) The data also could provide 
information on the relative effects of bankruptcies on creditors 
through a comparison of the amount of distributions to claimants with 
the amount of debt discharged. 

Several Factors Limit the Usefulness of the New Bankruptcy Data: 

Our review found that although the data requirements of the act will 
provide some additional information about consumer bankruptcies, their 
usefulness is limited for several reasons. 

* Content. The new data do not, nor were they intended to, provide 
significant information about some of the characteristics of consumer 
bankruptcies that are of key interest to policy makers--most notably, 
the reasons consumers filed for bankruptcy, the nature or source of the 
debts, and the demographic characteristics of the filers. As noted 
earlier, this type of information is very difficult to capture through 
the formal bankruptcy system. 

* Aggregation. The data reported by the judiciary are provided in the 
aggregate as statistics--rather than as case-level data--limiting the 
value of the information, according to some Trustee Program staff, 
researchers, and judges we spoke with. Aggregated numbers do not allow 
researchers and policy makers to drill down into the data to gain an 
understanding of the bankruptcy system. For example, an academic 
researcher we spoke with noted that "total assets" and "total 
liabilities" in the aggregate do not provide a useful picture of the 
average debtor's financial situation. 

* Narrow scope. The scope of what is provided by some of the specific 
data elements is relatively narrow. For example, the act requires the 
judiciary to report the number of cases in which creditors were "fined 
for misconduct."[Footnote 39] However, because courts may reprimand 
creditors in a variety of ways, this statistic provides only a limited 
picture of sanctions imposed against creditors in bankruptcy courts. 

* Lack of specificity. Alternatively, some statistics are so broad in 
what is included that the usefulness of the data is unclear. For 
example, the act requires that the judiciary report "total assets," but 
this does not distinguish between net assets and assets with liens 
attached (such as a home with a mortgage). Further, total assets 
includes assets that are shielded from unsecured creditors, as defined 
by federal and state exemption laws. As such, the statistic will not be 
an accurate indicator of debtors' net worth or of the amount of equity 
that can actually be liquidated and distributed to creditors. 

* Accuracy. Much of the data in the new annual statistics is based on 
information that debtors provide when submitting forms, schedules, 
motions, and other court filings. As noted in AOUSC's statistical 
report, self-reported data may be incomplete or inaccurate. For 
example, as described earlier, debtors do not always correctly 
designate whether their debts are primarily consumer versus business 
debt, and thus the new statistics may include some business cases that 
have been incorrectly designated as consumer cases. Similarly, certain 
data in the new trustee final reports are derived from information 
provided by the debtor in the bankruptcy forms. 

* Definitional issues. Certain definitional issues may limit the 
usefulness of some of the specific data elements in the statistical 
requirements and uniform final reports. For example: 

- The Bankruptcy Reform Act requires reporting on "the aggregate amount 
of debt discharged," but the definition provided in the act does not, 
in fact, represent the amount of debt actually discharged in 
bankruptcy, according to AOUSC officials and legal experts we spoke 
with.[Footnote 40] In addition, included in this statistic are debts 
with enforceable liens (such as mortgages on real property).[Footnote 
41] As a result, the statistic does not provide a true picture of the 
amount of debt eliminated in consumer bankruptcies, which can be a 
useful macroeconomic indicator. 

- The act requires that uniform final reports include "assets 
abandoned"--assets that are not liquidated or distributed because they 
are of little value or benefit or might be too burdensome. The Trustee 
Program defines assets abandoned for no-asset Chapter 7 cases as the 
current value of real and personal property on the debtor's schedules 
less the total value of exemptions the debtor claimed. Under this 
definition, the data could include assets secured by reaffirmed debts, 
which are not actually abandoned. 

- The act also requires the uniform final reports to include "claims 
discharged without payment," which the Trustee Program defines for 
Chapter 7 no-asset cases as the sum of the claims listed by debtors on 
their official filing forms. Some private trustees have noted that not 
all claims listed by the debtors are actually discharged without 
payment--for example, the value of reaffirmed debts and 
nondischargeable categories of debt such as domestic support 
obligations and secured claims. As a result, this data element may not 
provide meaningful information on the amount of debts discharged 
without payments to creditors in Chapter 7 no-asset cases. 

Trustee Program officials told us they believed their definitions 
strike the best achievable balance between the reasonable need of the 
public for information and the burden of reporting placed on trustees. 
[Footnote 42] With regard to the definition of "assets abandoned," they 
noted that requiring trustees to determine which debts had been 
reaffirmed would cause additional burden on trustees and delays in 
closing cases. With regard to "claims discharged without payment," they 
noted that (1) trustees usually file a no-asset report before the 
expiration of a creditor's deadline for objecting to the 
dischargeability of a debt, and (2) the Bankruptcy Code provides that 
certain debts are not discharged regardless of how they are scheduled 
by the debtor. As a result, program officials told us, their definition 
provides information about the amount of claims that have been 
scheduled to be discharged while allowing trustees to expeditiously 
close no-asset cases without waiting for the objection deadline to pass 
and without requiring the trustee to make an independent determination 
as to which of the debts listed by the debtor are dischargeable. 

Releasing Case-Level Data Used for Bankruptcy Reform Act Statistics 
Could Be Beneficial: 

AOUSC currently has no plans to provide public access to the raw, case- 
level data used to generate the statistics required by the Bankruptcy 
Reform Act. A variety of stakeholders in the bankruptcy process told us 
that these case-level data would be useful--despite their limitations-
-if made publicly available as a data set. For example, two researchers 
told us that the case-level data would permit additional analyses, such 
as determinations of statistically significant differences among groups 
of debtors. The case-level data also would allow the creation of 
statistics aggregated by categories other than state and judicial 
district, and also would permit examination of the variability of 
debtors' income, assets, and liabilities. A representative of a 
financial services trade association noted that creditors could use the 
data to refine their risk models by analyzing the characteristics of 
filers to determine the likelihood that particular debtors will repay 
their debts. In addition, Trustee Program staff noted that case-level 
data on the time elapsed between the filing and closing of cases could 
be useful in comparing how quickly individual trustees administer 
cases. Further, several bankruptcy judges we spoke with suggested that 
case-level data could be useful, in particular, in understanding the 
characteristics of Chapter 13 cases and the degree to which they have 
successful outcomes. 

An AOUSC official noted that the data underlying the new statistics 
were of uncertain quality and that it would therefore be imprudent to 
publicly release these raw data until AOUSC has time to better analyze 
the information. However, other stakeholders have noted that concerns 
about the quality of the data underlying the statistics should not 
necessarily prevent AOUSC from releasing it. Further, Trustee Program 
staff and a researcher told us that access to the case-level data could 
enable external parties to assess their reliability and limitations-- 
for example, by verifying the data against the case files in PACER and 
removing erroneous data values. Others have noted that, as a general 
principle, government agencies should be as transparent as possible in 
releasing supporting data for public examination and assessment of the 
quality of the statistics drawn from them. 

AOUSC staff noted that there was no statutory requirement for releasing 
the case-level data used to meet the statistical requirements of the 
Bankruptcy Reform Act, and noted that doing so could raise privacy 
concerns. However, providing public access to case-level data would be 
consistent with section 604 of the act, which recommended as national 
policy releasing in a usable form the electronic public record data 
held by bankruptcy clerks. More broadly, the judiciary's 2008 strategic 
plan for information technology recognizes external parties as major 
consumers of court data and includes as one of its objectives easy 
access to appropriate case-related information.[Footnote 43] The plan 
notes, however, the need to balance data accessibility with privacy and 
security concerns, pointing out that certain types of cases, categories 
of information, and specific documents may require special protection 
from unlimited public access. 

Conclusions: 

Long-standing questions have existed about the information available on 
consumer bankruptcies. While statistics are published on the numbers of 
filings, little information is available on the characteristics of 
individuals who file for bankruptcy or the nature and outcomes of their 
cases. Much of the information that is collected during the bankruptcy 
process is not readily accessible by the public in a format that allows 
for the extraction, compilation, and analysis of data across multiple 
cases. These shortcomings limit the ability of scholars and other 
parties to gather and analyze information that would be useful in 
assessing the bankruptcy system. Congress is similarly limited in its 
ability to make bankruptcy policy and formulate legislation based on 
empirical data rather than anecdotal evidence. 

The data provisions of the Bankruptcy Reform Act were a useful step in 
addressing this issue by increasing the amount of information available 
and by facilitating, to some extent, its accessibility and uniformity. 
The plans by the Trustee Program to use data-enabled "smart forms" for 
its new final reports will enhance the utility of this new information. 
At the same time, the value of certain annual statistics is likely to 
be limited, in part because some of the data elements are narrow in 
scope and may not provide a meaningful or comprehensive picture of the 
issues they address. As further statistical reports are issued, the 
ultimate value and limitations of the Bankruptcy Reform Act's data 
requirements will likely become clearer, and Congress may find it 
beneficial to review whether particular data elements required would 
benefit from modifications that would help ensure they are providing 
information useful to policy makers in assessing the consumer 
bankruptcy system. 

Progress has been made in recent years in making bankruptcy data more 
available and accessible to various parties. However, a tension remains 
in the extent to which the judiciary focuses bankruptcy data efforts 
solely on internal requirements versus the needs or preferences of 
researchers and policy makers. It is unclear whether it is the 
appropriate role of the judicial system to collect certain kinds of 
additional information from the bankruptcy process, such as the reasons 
people file for bankruptcy. Nevertheless, policy makers and the public 
could be better served if the judiciary took steps to further 
facilitate access to existing data already collected and maintained in 
its systems. For example, one possible option could be to expand the 
search and output capability of the U.S. Party/Case Index to enable 
easier access to, and more productive use of, the full array of data 
residing in this system. Similarly, despite the limitations of the 
Bankruptcy Reform Act's statistics, publicly releasing the case-level 
data used to generate these statistics could be a valuable resource in 
efforts to further analyze and understand consumer bankruptcies. 
Implementation of data-enabled forms by the judiciary also could be 
beneficial by allowing more efficient use and analysis of information 
collected. Before such steps could be taken, however, certain issues 
would need to be resolved--such as privacy and security concerns and 
the appropriate disclosure of data limitations. 

Facilitating the public access and usability of data already held in 
the judiciary's databases would be consistent with the recommendations 
of the National Bankruptcy Review Commission and section 604 of the 
Bankruptcy Reform Act, both of which called for a national policy of 
releasing the maximum amount of bankruptcy data in a usable electronic 
form. Policy makers need adequate information about the characteristics 
and outcomes of bankruptcies to make sound and informed policy choices. 
Better access to bankruptcy data already held in the judiciary's data 
systems could facilitate scholarly research, the informed allocation of 
bankruptcy resources, and the formulation of bankruptcy policy. 

Recommendation for Executive Action: 

To help provide additional information on consumer bankruptcies useful 
to policy makers and others, we recommend that the Director of AOUSC 
expeditiously identify and implement--subject to appropriate privacy 
and security safeguards--measures to further improve public 
accessibility to those bankruptcy data that AOUSC already maintains in 
its information systems. For example, AOUSC might consider whether it 
would be practical to expand the search and output capability of the 
U.S. Party/Case Index. AOUSC also might explore appropriate options for 
releasing at least some of the case-level data used to generate the 
Bankruptcy Reform Act statistics. 

Agency Comments: 

We provided a draft of this report to AOUSC and the Department of 
Justice for comment. These agencies provided technical comments that we 
incorporated as appropriate. In addition, AOUSC provided a written 
response, which is reprinted in appendix II. 

In its comment letter, AOUSC said it would carefully consider GAO's 
recommendation to identify and implement measures to further improve 
public accessibility to bankruptcy data. The agency commented that the 
judiciary already provides a high level of access to case records and 
information and that over the past decade it has substantially 
increased the amount of information it makes available to users of the 
bankruptcy system. The agency also reiterated the need to balance 
access and privacy interests in making decisions about widespread 
public disclosure and dissemination of information in case files. AOUSC 
said that in January 2009, it will begin assessing potential 
enhancements to the federal judiciary's electronic public access 
services and technical interfaces, and will consider making additional 
existing data available through the U.S. Party Case/Index, as we 
suggested. The agency also said it will assess issues related to 
releasing case-level Bankruptcy Reform Act data and will present its 
recommendation to the appropriate Judicial Conference committees. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution of it until 30 
days from the date of this letter. We will then send copies of this 
report to the Ranking Member of the Committee on the Judiciary, U.S. 
Senate; the Ranking Member of the Committee on the Judiciary, House of 
Representatives; the Director of the Administrative Office of the 
United States Courts; the Attorney General; and other interested 
committees and parties. The report also is available at no charge on 
the GAO Web site at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions concerning this report, please 
contact me at (202) 512-6806 or jonesy@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made major contributions to 
this report are listed in appendix III. 

Signed by: 

Yvonne D. Jones: 
Director, Financial Markets and Community Investment: 

List of Requesters: 

The Honorable Patrick J. Leahy: 
Chairman: 
Committee on the Judiciary: 
United States Senate: 

The Honorable John Conyers, Jr. 
Chairman: 
Committee on the Judiciary: 
House of Representatives: 

The Honorable Richard J. Durbin: 
The Honorable Russell D. Feingold: 
The Honorable Edward M. Kennedy: 
United States Senate: 

The Honorable Howard L. Berman: 
The Honorable William D. Delahunt: 
The Honorable Sheila Jackson Lee: 
The Honorable Zoe Lofgren: 
The Honorable Jerrold Nadler: 
The Honorable Robert C. Scott: 
The Honorable Chris Van Hollen: 
The Honorable Debbie Wasserman Schultz: 
The Honorable Melvin L. Watt: 
House of Representatives: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our report objectives were to examine (1) the availability and 
accessibility of data from the bankruptcy system and (2) the potential 
benefits and limitations of the new data requirements of the Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2005 (Bankruptcy Reform 
Act) in addressing these issues. This report focuses on consumer, or 
personal, bankruptcies rather than business bankruptcies. 

To address both of the objectives, we gathered documentation from and 
spoke with representatives of the U.S. Trustee Program's (Trustee 
Program) Executive Office for U.S. Trustees, including units 
responsible for information technology and the oversight of private 
trustees; two Trustee Program regional offices; the Administrative 
Office of the United States Courts (AOUSC); and selected individual 
bankruptcy courts, including four bankruptcy judges and six bankruptcy 
clerks. We also spoke with, and in some cases gathered documentation 
from, representatives of the National Association of Bankruptcy 
Trustees and National Association of Chapter 13 Trustees, two 
professional associations representing Chapter 7 and Chapter 13 
trustees, respectively; companies that provide software for case 
management for private trustees and bankruptcy filings for attorneys; 
the National Data Center and Automated Access to Court Electronic 
Records, private organizations that provide bankruptcy data for a fee; 
the National Association of Consumer Bankruptcy Attorneys; the National 
Consumer Law Center; the American Bankruptcy Institute; the Financial 
Services Roundtable; and academic researchers who study the bankruptcy 
system and use the data that it generates. 

In addition, we reviewed the strategic plans for information technology 
developed by the Trustee Program and AOUSC. We also reviewed 
correspondence between these two parties on the potential 
implementation of data-enabled forms, and reviewed public comments they 
received related to this issue. We also reviewed the meeting minutes 
and other documentation of relevant committees and subcommittees of the 
Judicial Conference of the United States related to bankruptcy data and 
data-enabled forms. 

To address the first objective, we reviewed academic literature that 
has used, studied, or commented on the information on consumer 
bankruptcies available from the court system and the Trustee Program. 
In addition, we reviewed our prior reports that have used bankruptcy 
data and have identified some of the limitations of these data, 
including reports related to child support enforcement and 
reaffirmation agreements. Further, we reviewed materials produced by 
the National Bankruptcy Review Commission. We also reviewed user 
guides, protocols, data dictionaries, and other relevant information 
for the judiciary's major bankruptcy data systems, including the Public 
Access to Court Electronic Records system, U.S. Party/Case Index, and 
Case Management/Electronic Case Files system. In addition, we reviewed 
the Official Bankruptcy Forms and visited a bankruptcy court to observe 
how information from the forms is inputted into the Case Management/ 
Electronic Case Files system. 

To address the second objective, we reviewed relevant provisions of the 
Bankruptcy Reform Act and some corresponding legislative history. We 
also reviewed documentation on the judiciary's implementation of the 
new statistical requirements of the act, which included a tracking 
report developed by AOUSC to monitor its efforts to implement the act; 
minutes from the Judicial Conference's Advisory Committee on Bankruptcy 
Rules; changes to the Official Bankruptcy Forms; documents related to 
the modifications made to the case management system to collect 
additional data elements; training materials used to educate court 
staff on collecting the new data; and documents on the initiation of 
the NewSTATS statistical infrastructure. 

We also reviewed documentation on the Trustee Program's implementation 
of new requirements related to uniform final reports, including the 
agency's proposed and final rules related to these reports and draft 
and final versions of the agency's report formats. In addition, we 
reviewed public comment letters submitted to the Trustee Program in 
response to the rulemaking and the draft reports. We also reviewed 
correspondence between the Trustee Program and the judiciary related to 
the addition of new data fields to the daily downloads the program 
receives from AOUSC. 

We conducted this performance audit from June 2007 through December 
2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Administrative Office of the United 
States Courts: 

Administrative Office Of The United States Courts: 
"A Tradition Of Service To The Federal Judiciary" 
James C. Duff, Director: 
Washington, D.C. 20544: 

November 25, 2008: 

Ms. Yvonne Jones: 
Director: 
Financial Markets & Community Investment: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Ms. Jones: 

Thank you for the opportunity to comment on the draft report on 
bankruptcy data. The report includes a recommendation that the 
Judiciary consider ways to make existing bankruptcy data more readily 
available to researchers and others. 

The Judiciary has long demonstrated its firm commitment to public 
access to case records, but it is important to recognize, as the report 
does, that there is a need to balance access and privacy interests in 
making decisions about widespread public disclosure and dissemination 
of information in case files. The authority to protect personal privacy 
and other legitimate interests in non-disclosure is based, like public 
access rights, in common law and constitutional principles. Certain 
types of cases, categories of information, and specific documents may 
require special protection from unlimited public access. 

The Judiciary will consider carefully GAO's recommendation to provide 
even greater access to existing data while also considering privacy, 
security, and technical concerns. In January 2009, the Administrative 
Office (AO) will begin an assessment of the federal judiciary's 
electronic public access services and technical interfaces (such as 
Public Access to Court Electronic Records (PACER) and the U.S. Party 
Case Index), with input from various stakeholders, such as researchers, 
the bar, the media, and government agencies in addition to the courts. 
The goal of this assessment will be to identify potential enhancements 
to public-access services, including making additional existing data 
available through the U.S. Party Case Index, as suggested by GAO. In 
addition, the AO will assess the issues related to releasing case-level 
Bankruptcy Abuse Prevention and Consumer Protection Act data, and will 
present its recommendation to the, appropriate Judicial Conference 
Committees. 

The Judiciary already provides a high level of access to case records 
and information. Over the past decade, the Judiciary has addressed 
recommendations of the Bankruptcy Statistics Task Force and has 
substantially increased the amount of data and other information it 
makes available to other users of the bankruptcy system, including 
attorneys, trustees, the Executive Office of the U.S. Trustees, 
researchers and the public. The AO publishes a wide array of 
statistical reports on the business of the federal courts. The 
implementation of the Case Management/Electronic Case Files case 
management system has enabled the judiciary's PACER system to provide 
easy-to-use Internet-based public access to electronic versions of case 
dockets and documents filed with the courts. The PACER system has been 
highly successful and currently has over 900,000 registered users. We 
have come a long way from the time when the only access to case 
information required interested parties to go to a courthouse to review 
case files, and we will continue to explore feasible ways to enhance 
public access to information. 

I would like to express my appreciation for work of the GAO team on 
this study. 

Sincerely, 

Signed by: 

James C. Duff: 
Director: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Yvonne D. Jones, (202) 512-6806 or jonesy@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Jason Bromberg, Assistant 
Director; Nicholas Alexander; Krista Breen Anderson; Anne A. Cangi; 
Emily Chalmers; Wilfred Holloway; Angela Pun; and Omyra Ramsingh made 
key contributions to this report. 

[End of section] 

Footnotes: 

[1] National Bankruptcy Review Commission, Bankruptcy: The Next Twenty 
Years, National Bankruptcy Review Commission Final Report (Washington, 
D.C., Oct. 20, 1997). 

[2] Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 
Pub. L. No. 109-8, 119 Stat. 23 (Apr. 20, 2005) (as amended, Bankruptcy 
Reform Act). 

[3] Bankruptcy Reform Act § 601, 119 Stat. at 119-20 (codified at 11 
U.S.C. § 159). 

[4] Bankruptcy Reform Act § 602, 119 Stat. at 120-22 (codified at 11 
U.S.C. § 589b). 

[5] Although a debtor is not personally liable for discharged debts, a 
valid lien (i.e., a charge upon specific property to secure payment of 
a debt) that has not been voided (i.e., made unenforceable) in the 
bankruptcy case will remain enforceable after the bankruptcy case 
closes. 

[6] Bankruptcy cases in Alabama and North Carolina are not under the 
jurisdiction of the Trustee Program; instead, bankruptcy administrators 
within the judicial branch administer the cases in the judicial 
districts in those states. 

[7] Bankruptcy filers may voluntarily reaffirm--that is, agree to pay-
-certain debts with creditors in an effort to retain assets that secure 
a debt, such as an automobile or home that otherwise would likely have 
to be surrendered to the creditor (11 U.S.C. § 521(a)(2)(A)). 

[8] See, for example, Elizabeth Warren, Deborah Thorne, and Teresa 
Sullivan, "Generations of Struggle," AARP Public Policy Institute 
(Washington, D.C., June 2008) (forthcoming in Harvard Law and Policy 
Review, January 2009). 

[9] GAO, Potential Effect of Bankruptcy Abuse Prevention and Consumer 
Protection Act on Child Support Payments Cannot Be Determined because 
Data Needed for Study Are Not Available, [hyperlink, 
http://www.gao.gov/products/GAO-08-148R] (Washington, D.C.: Oct. 26, 
2007). 

[10] GAO, Bankruptcy: Implementation of Reform Act's Debt Reaffirmation 
Agreement Provisions, [hyperlink, 
http://www.gao.gov/products/GAO-08-94] (Washington, D.C.: Dec. 7, 
2007). A reaffirmation agreement is when a debtor agrees to make 
payments to creditors to retain an asset, such as an automobile or 
home, that otherwise would likely be surrendered during the bankruptcy 
process. 

[11] National Bankruptcy Review Commission, Bankruptcy: The Next Twenty 
Years, National Bankruptcy Review Commission Final Report (Washington, 
D.C., Oct. 20, 1997). 

[12] Executive Office for United States Trustees, U.S. Department of 
Justice, "Public Report: Debtor Audits by the United States Trustee 
Program, Fiscal Year 2007" (Washington, D.C., April 2008). 

[13] Steven W. Rhodes, "An Empirical Study of Consumer Bankruptcy 
Papers," American Bankruptcy Law Journal, vol. 73, no. 3 (summer 1999). 

[14] Steven W. Rhodes, "Demonstrating a Serious Problem with 
Undisclosed Assets in Chapter 7 Cases," Norton Bankruptcy Law Adviser 
(May 2002). 

[15] Final reports are the responsibility of the Trustee Program since 
the responsibility for the administration of estates falls under the 
Trustee Program rather than the judiciary. 

[16] See 11 U.S.C. § 101(8). 

[17] Robert M. Lawless and Elizabeth Warren, "The Myth of the 
Disappearing Business Bankruptcy," California Law Review, vol. 93, no. 
3 (2005). An estimate of business bankruptcies was derived by 
extrapolating from a sample of 1,771 individual debtors as part of the 
Consumer Bankruptcy Project. Debtors completed a questionnaire and some 
were interviewed, and debtors' court records were reviewed. 

[18] Fed. R. Bankr. P. 1005, 1007, and 9037. Rule 9037 was adopted in 
compliance with section 205(c)(3) of the E-Government Act of 2002, Pub. 
L. No. 107-347. 

[19] Debtors must submit to the clerk a separate statement with the 
debtor's full Social Security number, but the statement is not 
maintained in the case file or accessible by the public. 

[20] The judiciary uses other data systems in addition to those listed 
here. For example, the NewSTATS system is used by AOUSC's Statistics 
Division to store and report bankruptcy data from bankruptcy courts. 

[21] Many bankruptcy attorneys use private software that generates the 
documents required for filing a bankruptcy case and automatically 
uploads required data into a court's CM/ECF system. 

[22] While a user can conduct a search by entering a filer's Social 
Security number, the index does not display such numbers. 

[23] The total charge for a single document or case-specific report is 
limited to the fee for 30 pages, which is $2.40. 

[24] The judiciary electronically transmits to the Trustee Program 
certain case-level data from CM/ECF on a daily basis. In March 2008, 
the judiciary agreed to expand the data elements provided in these 
daily transfers to help the Trustee Program meet new reporting 
requirements of the Bankruptcy Reform Act. 

[25] There also has been support for data-enabled forms within 
Congress. The Senate Appropriations Committee reports accompanying the 
bills containing the Department of Justice's 2006, 2007, 2008, and 2009 
appropriations stated that the committee "support[s] the use of data- 
enabled, or 'smart forms' for filing bankruptcy petitions and 
schedules." Sen. Rep. No. 109-88, at p. 17-18 (2005); Sen. Rep. No. 109-
280, at p. 23 (2006); Sen. Rep. No. 110-124, at p. 60 (2007); and Sen. 
Rep. No. 110-397, at p. 48 (2008). 

[26] Noreen Clancy and Stephen J. Carroll, "Identifying Fraud, Abuse, 
and Error in Personal Bankruptcy Filings." Prepared for the National 
Institute of Justice by RAND Corporation, 2007. 

[27] The Bankruptcy Reform Act required a "means test" to determine 
whether a debtor is eligible to file under Chapter 7. Eligibility is 
determined, in part, by whether the debtor's current monthly income 
minus allowable living expenses is less than the applicable state 
median income. Bankruptcy Reform Act § 102, 119 Stat. at 27-32 
(amending 11 U.S.C. § 707). 

[28] Data held in the U.S. Party/Case Index but not publicly accessible 
include, among other things, a case's date of discharge or dismissal; 
whether a discharge was granted, denied, revoked, or withheld; whether 
the case was dismissed for abuse, or failure to make payments; and 
whether a case was transferred within or to another district. 

[29] The Inter-University Consortium for Political and Social Research 
is an academic membership-based organization hosted by the University 
of Michigan. [hyperlink, http://www.icpsr.umich.edu]  

[30] The scope of this report is largely limited to the provisions 
added by sections 601 and 602 of the Bankruptcy Reform Act and the 
sense of Congress expressed in section 604, but the act included other 
provisions intended to provide additional information about the 
bankruptcy system. For example, section 105(c) of the act required the 
Trustee Program to assess and submit to Congress a report on the 
effectiveness of debtor education. Section 315(c) of the act required 
the AOUSC to assess and submit to Congress a report on the 
effectiveness of the procedures implemented to safeguard the 
confidentiality of debtors' tax information provided under section 521 
of the Bankruptcy Code. 

[31] National Bankruptcy Review Commission, Bankruptcy: The Next Twenty 
Years, Final Report, "Chapter 4: Other Recommendations and Issues (Data 
Compilation and Dissemination" and "Appendix C-1: Report of the 
Bankruptcy Statistics Task Force of the Administrative Office of the 
United States Courts" (Washington, D.C., Oct. 20, 1997). 

[32] 28 U.S.C. § 159 (as added by Pub. L. No. 109-8, Title VI, § 
601(a), 119 Stat. 119 (Apr. 20, 2005)). The Bankruptcy Code defines 
consumer (nonbusiness) debt as that incurred by an individual primarily 
for a personal, family, or household purpose (11 U.S.C. § 101(8)). 
While most bankruptcies filed under Chapter 11 involve a corporation or 
partnership, individuals also can file under Chapter 11. From 1990 
through 2007, fewer than 0.5 percent of consumer bankruptcies were 
filed under Chapter 11. 

[33] GAO, Bankruptcy Reform: Dollar Costs Associated with the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 
[hyperlink, http://www.gao.gov/products/GAO-08-697] (Washington, D.C.: 
June 27, 2008). 

[34] 28 U.S.C. § 589b (as added by Pub. L. No. 109-8, Title VI, § 602, 
119 Stat. at 120-22 (Apr. 20, 2005)). Bankruptcy cases filed under 
Chapter 12, which apply to family farmers and family fishermen, are 
outside the scope of this report. The Attorney General also is required 
to issue rules requiring uniform forms for the periodic reports filed 
for Chapter 11 cases, which also are outside the scope of our report 
since most involve a corporation or partnership. 

[35] 28 U.S.C. § 589b(c) (as added by Pub. L. No. 109-8, Title VI, § 
602(a), 119 Stat. 120 (Apr. 20, 2005)). "In issuing rules proposing the 
forms…the Attorney General shall strike the best achievable practical 
balance between --(1) the reasonable needs of the public for 
information about the operational results of the Federal bankruptcy 
system; (2) economy, simplicity, and lack of undue burden on persons 
with a duty to file reports; and (3) appropriate privacy concerns and 
safeguards." 

[36] Procedures for Completing Uniform Forms of Trustee Final Reports 
in Cases Filed Under Chapters 7, 12, and 13 of Title 11, 73 Fed. Reg. 
6447 (Feb. 4, 2008) (proposed rule). The Trustee Program drafted 
uniform forms for a variety of trustees' case administration reports, 
which we collectively refer to as "final reports." 

[37] Procedures for Completing Uniform Forms of Trustee Final Reports 
in Cases Filed Under Chapters 7, 12, and 13 of the Bankruptcy Code, 73 
Fed. Reg. 58438, 58444-45 (Oct. 7, 2008) (final rule)(to be codified at 
28 C.F.R. § 58.7). 

[38] For Chapter 7 cases with no assets, the trustee final report is 
filed as a text entry in the case docket, rather than as a separate 
document. 

[39] 28 U.S.C. § 159(c)(3)(G). The Bankruptcy Code does not 
specifically define creditor misconduct, but in its report AOUSC notes 
that an example might be a creditor who willfully violated the 
automatic stay that protects debtors after they file for bankruptcy. 

[40] The Bankruptcy Reform Act defines "aggregate amount of debt 
discharged" as "the difference between the total amount of debt and 
obligations of a debtor reported on the schedules and the amount of 
such debt reported in categories which are predominantly 
nondischargeable." Because this definition does not actually describe 
debt discharged, the AOUSC referred to this statistic in its report as 
"net scheduled debt." 

[41] Although a debtor is not personally liable for discharged debts, a 
valid lien on a secured debt can remain after the bankruptcy case, 
allowing the secured creditor to recover the property. 

[42] As noted earlier, the Bankruptcy Reform Act requires that in 
proposing the forms for the uniform final reports, the Attorney General 
shall strike the best achievable practical balance between the need for 
public information; economy, simplicity, and lack of undue burden on 
those filing the reports; and appropriate privacy concerns and 
safeguards (28 U.S.C. § 589b(c)). 

[43] AOUSC, "IT Long Range Plan for Information Technology in the 
Federal Judiciary," Fiscal Year 2008 Update. 

[End of section] 

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