Local courts are seeing a 10 percent increase in bankruptcy filings, according to a recent United States Courts report.
According to the report issued on July 31, the number of personal and business bankruptcy filings increased by this percentage in the 12-month period ending on June 30, 2023. The Administrative Office of the U.S. Courts reported that a total of 418,724 bankruptcy filings were made in the year ending June 2023, as compared to the 380,634 filed in the year ending June 2022.
Of these cases, 239,125 of them were Chapter 7, while 173,362 were Chapter 13 bankruptcy cases. A total of 5,986 were Chapter 11 business bankruptcy filings.
A number of factors come into play as to why bankruptcy filings have increased, both in personal filings, as well as in business filings. On the business side, the bankruptcy courts have seen an overall increase in business restructurings and Chapter 11 filings in 2023. Bankruptcy experts attribute the filings to the several interest rate hikes made by the Federal Reserve, with ten successive rate hikes following each other. These interest rate hikes make borrowing money more expensive for consumers who are already struggling financially. Add the rising cost of living and inflation, and this can cause a person’s finances to spiral.
With no end in sight, bankruptcy courts are feeling the pressure with these higher caseloads, including in the Southern District of Florida. Being only halfway through 2023, the Southern District of Florida courts show that they are on course to top last year’s filings.
From a national perspective, non-business bankruptcy filings increased a total of 9.5 percent, going from 403,000 filed in 2023 to 367,886 filed in 2022. Business bankruptcy filings increased by a striking 23.3 percent, going from 12,748 reported in the year ending June 30, 2022, to 15,724 reported in the year ending June 30, 2023.
Bankruptcy totals are reported by the U.S. Courts four times annually, and the next report will show if this upwards trend is expected to continue. Bankruptcy filings over any 12-month period have increased only rarely since filings peaked in 2010. Bankruptcies fell sharply after the pandemic began in early 2020, despite some early COVID-related disruptions to the economy.
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.