The American Bankruptcy Institute recently released a report showing new bankruptcy filings in February of this year were up in all major categories when compared to February 2022. This included an 18% uptick in total filings, with 31,889 made last month compared to just over 27,000 a year ago.
Epiq Bankruptcy provided the data used.
According to the ABI, “Total commercial filings also increased 18 percent, to 1,696 versus 1,442. Commercial chapter 11 filings increased 83 percent to 373 filings, up from 204. Subchapter V small business elections increased 45 percent to 120 versus the 83 filings registered the previous year.”
Individual filings also went up by 18% for February 2023 compared to February 2022, although numbers still remain well below pre-pandemic levels.
“The growing number of households and businesses filing for bankruptcy reflects the mounting economic challenges they now face,” said ABI Executive Director Amy Quackenboss. “Debt loads are expanding as the prices of goods and services have gone up with inflation and the cost of borrowing continues to rise. While pandemic relief efforts have largely expired, the safe haven of bankruptcy is continually available for financially distressed businesses and consumers.”
Comparing open to closed cases, while new filings are on the rise, the current 662,204 total open cases represent another month-over-month decline. There are 36% fewer open cases since May 2019, when there were more than 1 million. Looking back one year, there are 52,662 fewer open cases than the 714,866 cases open in February 2022, a 7% decline.
“Overall, the stimuluses have had a positive effect for individuals and companies, as 10,843 more cases have closed than opened in 2023,” said Gregg Morin, vice president of Business Development and Revenue for Epiq Bankruptcy. “However, as new monthly filings rise, this trend is likely to end.”
NOTE — ABI has partnered with Epiq Bankruptcy to provide the most current bankruptcy filing data for analysts, researchers, and members of the news media. Epiq Bankruptcy is the leading provider of data, technology, and services for companies operating in the business of bankruptcy.