U.S. consumer bankruptcy filings are on the rise again, across all chapters, according to data recently published by Epiq Bankruptcy. This increase in filings represents a change in the trend previously seen with new bankruptcy cases, as numbers have been on the decline since the start of the COVID-19 pandemic.
According to Epiq, the total number of commercial bankruptcy filings increased by twelve percent (12%) in January. In January 2023, 1,694 new commercial bankruptcy cases were filed, as compared to 1,508 filed in January 2022.
Of these cases, the largest increase was seen in commercial Chapter 11 bankruptcy cases. These cases increased by 70 percent (70%), jumping from 151 Chapter 11 filings in January 2022 to 257 filings in 2023. Within the Chapter 11 cases filed, Subchapter V bankruptcy small business filings increased by 49% in January from 92 to 137 in the same span of time.
Overall, the total number of bankruptcy filings in January 2023 were up 19 percent (19%), going from 26,215 total filings made in January 2022 to 31,087 in January 2023. Individual filings increased by 20 percent as compared to January 2022, going from 24,703 to 29,545 individual bankruptcy cases filed. Additionally, individual Chapter 13 bankruptcy filings also increased by 32 percent from year-to-year, going from 10,346 to 13,702 new Chapter 13 cases started.
Epiq Bankruptcy’s vice president of business development pointed out, with respect to these figures, that they are still seeing more bankruptcy cases closing in a month than cases being opened. Therefore, they say it is hard to definitely state whether the increase in filings means that the country is seeing a turning point from the historic lows in new bankruptcy filings that has been seen since 2020.
When compared to December 2022, bankruptcy courts saw an increase in filings in every chapter, with the exception of Chapter 12. From December 2022 to January 2023, a six percent (6%) increase was seen in consumer bankruptcy filings. Individual Chapter 7 filings increased by two percent (2%), while individual Chapter 13 filings increased by 10 percent (10%) from December to January. The total Chapter 11 bankruptcy filings also saw an increase of 16 percent (16%) from December 2022 to January 2023.
Experts are still quick to note that these numbers are below what was seen before the COVID-19 pandemic. However, bankruptcy filings are continuing to increase as consumer debt loads increase, due to the limited availability of lower cost financing and increasing inflationary pressures. People are simply struggling to stay on solid ground as they navigate their finances, and more are utilizing bankruptcy as a tool to get them a fresh financial start.
Before filing for bankruptcy, certain steps should be taken to ensure that the case goes smoothly and is successful. Many times, it can help to sit down with a bankruptcy attorney for a free consultation, to discuss any potential issues that could arise in the case and to ensure that all the proper steps are taken by the consumer before filing.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
