Extract from Epiq’s article “A Look Into 2023: What do the Bankruptcy Statistics Really Mean?”
It has been quite the interesting year in bankruptcy so far, with filings increasing in several chapters. Providing some market observations based upon the number of filings for commercial and consumer bankruptcy filings can assist professionals in aligning their practice focus for the remainder of 2023. This requires an understanding of the current economic conditions, debt maturity dilemma, and how bankruptcy fits into the picture.
The Bankruptcy Data
Data collected by Epiq Bankruptcy provides state of the market observations, highlighting commercial and consumer bankruptcy filing trends. This data shows that the numbers are up across the board.
- Total bankruptcy filings were 217,420 during the first half of 2023, demonstrating a 17% increase from the 185,352 total filings during the first half of 2022.
- Getting more granular, total commercial filings were up 18% from last year and individual filings were up 17%.
- Chapter 11 commercial filings totaled 2,973 during the first half of 2023, which was a 68% increase compared to the first half of 2022.
- Small business filings, which are identified as Subchapter V elections of Chapter 11, totaled 814 in the first six months of 2023, demonstrating a 55% increase compared to the first half of 2022.
- Chapter 13 individual filings totaled 85,390 during first half of 2023, which was a 23% increase compared to the first half of 2022.
- All chapter filings increased in June 2023 compared to June 2022, with 37,700 total bankruptcy filings representing a 17% increase. Looking at June comparisons, commercial filings were up 12 percent and individual filings were up 18 percent.
The spike in bankruptcy filings may be puzzling as the economy seems fairly stable given the positive employment rate and the Federal Reserve’s attempts to curb inflation have had success.
