Bankruptcy Filings Decline Overall in 2017
10/9/2017 6:27:00 PM
Consumer and business filings through September 2017 are lower than 2016; perhaps due to high filing costs.
High filing costs are continuing to influence consumers’ and businesses’ decisions to seek financial relief through bankruptcy, according to the American Bankruptcy Institute (ABI).
Overall business bankruptcy filings declined 12 percent to 2,854 filings in September, compared to 3,251 filings in September 2016, according to a news release from the ABI. Consumer filings declined 7 percent from 61,384 in September 2016 to 57,147 in September this year.
Total filings in the U.S. also saw a 7 percent decline from 64,635 in September 2016 to 60,001 in September 2017, according to the news release and data provided by Epiq Systems Inc.
“Consumers and businesses looking to stay afloat through financial distress may steer away from the relief of bankruptcy due to high filing costs,” ABI Executive Director Samuel J. Gerdano said in the news release. “The recommendations of ABI’s Chapter 11 Commission and the ongoing efforts of the Commission on Consumer Bankruptcy aim to make bankruptcy more accessible for struggling businesses and families.”
Long-term data on bankruptcy filings also show a decline this year.
Total filings in the U.S. declined 1 percent in the first nine months, from Jan. 1 through Sept. 30, 2017, from the same time in 2016; 593,206 to 589,088, respectively.
“The 560,239 total noncommercial filings through the first three quarters of 2017 also represented a 1 percent drop from the noncommercial filing total of 564,244 through the first three quarters of 2016,” according to the ABI’s news release. “Commercial bankruptcy filings during the first nine months of the year decreased 0.4 percent to 28,849 from the 28,962 filings during the same period in 2016.”
The ABI reports, however, that commercial chapter 11 filings reached 425 in September 2017, a 16 percent jump over the 365 filings in September 2016. Overall, commercial chapter 11 filings also declined 3 percent to 4,200 in the first nine months of this year compared to 4,317 during that time in 2016, according to the news release.
The ABI also reports the average nationwide per capita bankruptcy filing rate for the first nine months of this year declined slightly to 2.53 (total filings per 1,000 population) from the 2.55 rate for the first eight months of the year.
The average daily filing for bankruptcies in September 2017 was 3,000, which is 3 percent lower than the 3,078 daily filings in September 2016, according to the news release.
States with the highest per capita filing rates in September were: Alabama (5.79); Tennessee (5.62); Georgia (4.72); Mississippi (4.17) and Utah (4.12.)
The ABI’s Chapter 11 commission recently made recommendations for reform of Chapter 11 are available here.
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