According to a new monthly bankruptcy filings report covering the calendar year 2023 published by Epiq AACER, commercial Chapter 11 bankruptcy filings increased a whopping 72% over the course of the year rising from 3,819 in 2022 to 6,569 in 2023.
Looking at the bigger picture, all commercial filings increased 19% to 25,627 in 2023 from the 21,479 filings recorded during 2022. Subchapter V elections within Chapter 11 also experienced a substantial increase in calendar year 2023, as the 1,939 filings represented a 45% increase from the 1,334 recorded in 2022.
In total, all bankruptcy filings during the calendar year 2023 amounted to 445,186 filings, an 18% increase from the 378,390 recorded in 2022. While representing a substantial year-over-year increase, total bankruptcy filings remain lower than the pre-pandemic total of 757,816 recorded in CY2019.
“As anticipated, we saw new filings in 2023 increase momentum over 2022 with a significant number of commercial filers leading the expected increase and normalization back to pre-pandemic bankruptcy volumes,” said Michael Hunter, VP of Epiq AACER. “We expect the increase in number of consumer and commercial filers seeking bankruptcy protection to continue in 2024 given the runoff of pandemic stimulus, increased cost of funds, higher interest rates, rising delinquency rates, and near historic levels of household debt.”
Overall consumer filing totals for calendar year 2023 were 419,559, representing an 18% increase from the 356,911 consumer filings the previous year. The 175,964 consumer Chapter 13 bankruptcy filings during calendar year 2023 also registered an 18% increase over 2022’s total of 149,069. Consumer Chapter 7 filings increased 17% in CY2023 to 242,936 from 207,188 filings the previous year.
“Though still below pre-pandemic figures, bankruptcies in all filing categories climbed last year amid the evaporation of pandemic emergency responses, increased interest rates and tougher lending standards,” said ABI Executive Director Amy Quackenboss. “As interest rates remain elevated, increasing geopolitical tensions weigh on global supply chains and debt loads continue to grow, struggling businesses and families can turn to the proven process of bankruptcy for a financial fresh start.”
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