Bankruptcy Filings are on the Rise
I don’t have to tell you that bankruptcy filings have been at the lowest level since the mid-1980s and have been in a steady decline since the second quarter of 2020.[i] Given continued inflation and higher interest rates, it doesn’t take a Ph.D. in economics to realize that things are changing. It’s just a matter of time before we see an uptick in filings and who knows how much they may increase. Recent numbers tell the story.
It's All in the Numbers
Bankruptcy filings in August 2022 across all chapters totaled 35,355 – a 10% increase from the August 2021 total of 32,276, according to new research recently released from Epiq's Bankruptcy Analytics platform.[ii]
Overall commercial filings increased by 6% in August 2022, with 1,861 filings versus the 1,753 commercial filings in August 2021. Individual filings also increased by 10% in August (33,494 compared to 30,523 in August last year).
Total filings, both commercial and individual, show a 15% increase month-over-month compared to the July 2021 total of 30,854 filings. The August 2022 commercial filings represent a 16% increase compared to July’s commercial filings, while August’s individual filings represent a 15% increase compared to July’s individual filings.
For the first time in months, all chapters registered a month-over-month increase. Chapter 11 filings increased 81%, totaling 466 filings in August 2022 compared to 257 in July 2022. Similarly, August’s commercial Chapter 11 filings were up 91% over the 212 filings in July 2022. Chapter 13 filings increased 15%, totaling 14,981 filings compared to 12,992 in July. Chapter 7 filings increased 13%, totaling 19,884 compared to 17,593.
An increased volume means more disputes to be resolved. Having a mediator with bankruptcy knowledge and experience helps. We’re here when you need us, now or when the floodgates open.[iii]
[i] https://tradingeconomics.com/united-states/bankruptcies [ii] https://www.globenewswire.com/news-release/2022/09/01/2508999/10374/en/Bankruptcy-Filings-Increase-Across-All-Chapters-in-August-2022.html [iii] Not wishing misfortune on anyone, but ready to tackle what a tightened economy may bring, just like you are.