Findings from Epiq Bankruptcy reveal that new filings reached double digit-increases year-over-year across all main chapters in February.
03/08/2023 2:10 P.M.
2 minute read
A new report from Epiq Bankruptcy found that new bankruptcy filings in February 2023 registered double-digit increases year-over-year across all U.S. major filing categories.
Epiq Bankruptcy is a division of Epiq, a global technology-enabled services leader to the legal services industry and corporations, and is the leading provider of U.S. bankruptcy filing data.
The 31,889 total new bankruptcy filings in February were up 18% from the 27,006 filings registered the year before. Total commercial filings also increased 18%, to from 1,442 to 1,696. Commercial Chapter 11 filings increased 83% to 373 filings, up from 204. Subchapter V small business elections increased 45% from 83 filings registered the previous year to 120 in 2023.
Continuing year-over-year, total individual filings increased 18% from 25,564 in February 2022 to 30,193 in February 2023. While still below pre-pandemic levels, individual Chapter 7 filings increased 12% from 15,190 to 16,991, and individual Chapter 13 filings increased 28% from 10,311 to 13,149.
Comparing month-over-month, and considering there are three fewer days in February, the 31,889 total filings were still 2% higher than the 31,161 total filings in January. Conversely, total commercial filings dropped 1% to 1,696 from 1,713 the month prior.
Total Chapter 11 filings remained flat—373 versus 376—and subchapter V elections increased 5% from 114 to 120. Total individual filings increased 3% from 29,448 to 30,193, and individual Chapter 7 filings increased 8% from 15,717 to 16,991, while individual Chapter 13 filings decreased 4% to 13,149 from the 13,678 filed in January.
“The growing number of households and businesses filing for bankruptcy reflects the mounting economic challenges they now face,” said ABI Executive Director Amy Quackenboss. “Debt loads are expanding as the prices of goods and services have gone up with inflation and the cost of borrowing continues to rise. While pandemic relief efforts have largely expired, the safe haven of bankruptcy is continually available for financially distressed businesses and consumers.”
Comparing open to closed cases, while new filings are on the rise, the current 662,204 total open cases represent another month-over-month decline. There are 36% fewer open cases since May 2019, when there were more than 1 million. There are 52,662 fewer open cases than the 714,866 cases open in February 2022, a 7% decline.
“Overall, the stimuluses have had a positive effect for individuals and companies, as 10,843 more cases have closed than opened in 2023,” said Gregg Morin, vice president of Business Development and Revenue for Epiq Bankruptcy. “However, as new monthly filings rise, this trend is likely to end.”