Commercial Chapter 11 Filings Doubled Over Same Period Last Year
Inflation and rising interest rates are taking their toll on the American economy. An alarming and growing number of families and individuals are struggling to make ends meet. At the ends of their ropes, more and more are waving the white flag and filing for bankruptcy. And in the month of May, bankruptcies continue their tear long climb in volume.
Total and individual bankruptcies have continued to increase from the reduced volumes experienced during the three years of the COVID-19 pandemic. The 38,669 total filings in May 2023 represented a 23 percent increase from the May 2022 total of 31,330. Individual bankruptcy filings totaled 36,345 in May 2023, also registering a 23 percent increase from the May 2022 individual total of 29,559. Individual Chapter 13 filings increased 25 percent to 14,644 and individual Chapter 7 filings increased 22 percent to 21,625 from May 2022.
“Rising interest rates, inflation and elevated costs of borrowing can represent a daunting economic challenge to struggling families and businesses,” said ABI Executive Director Amy Quackenboss. “Amid these sustained economic pressures, bankruptcy provides financially distressed companies and households with access to a release valve.”
Commercial Chapter 11 filings increased 105 percent in May 2023 to 680 versus the 332 filings in May 2022, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. Nearly half of the Chapter 11 filings were made by corporate subsidiaries.
Overall commercial filings increased 31 percent in May 2023 to 2,324 versus the 1,771 registered in May 2022. Small business filings, captured as subchapter V elections within Chapter 11, registered a 31 percent increase to 149 in May 2023 versus 114 in May 2022.
May’s total bankruptcy filings represented a nine percent increase over the 35,485 total filings recorded the previous month. May’s commercial Chapter 11 filings increased 76 percent from the 387 filings in April 2023. The total commercial filing represented a 27 percent increase over the April 2023 commercial filing total of 1,835. All Chapter 11 subchapter V elections increased 12 percent from the 158 filed in April 2023. Total May individual filings represented an eight percent increase from the April 2023 individual filing total of 33,650.
“We have been diligently monitoring the ongoing trend of monthly new filings versus cases closed and it serves as another indicator for the direction of the bankruptcy market,” said Gregg Morin, Vice President of Business Development and Revenue for Epiq Bankruptcy. “After 35 consecutive months (April 2020 – February 2023) of more closed cases than new filings each month, the market had two consecutive months (March and April) of more new filings than closed cases. However, once again in May, 413 more cases closed than opened and year-to-date there are still 5,014 more closed cases than new filings.”
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. Its new Bankruptcy Analytics subscription service provides on-demand access to the industry’s most dynamic bankruptcy data, updated daily. Learn more at https://bankruptcy.epiqglobal.com/analytics.
About Epiq
Epiq, a global technology-enabled services leader to the legal industry and corporations, takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action, and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at www.epiqglobal.com.
About ABI
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.
Source: ABI
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