Bankruptcy Breakdown: Commercial, Individual Bankruptcies Up in First Half of Year

In a dramatic turn for the U.S. economy, commercial bankruptcies have soared in the first half of 2024, marking a significant increase from the previous year. According to data released by Epiq AACER, a provider of bankruptcy filing data, a total of 3,016 commercial chapter 11 bankruptcies were filed in the first six months of 2024. This figure represents a striking 34% rise compared to the 2,247 filings recorded during the same period in 2023.

Small businesses, grappling with economic uncertainties, have been particularly hard hit. Subchapter V elections within chapter 11, a mechanism tailored for small businesses seeking bankruptcy protection, saw a staggering 61% increase. The first half of 2024 witnessed 1,176 such filings, up from 730 in the corresponding period of 2023.

“Commercial filing trends continue to show strong double digit percentage increases in year-over-year filings, while individual filings increased at a much lower rate compared to commercial filings in the first half of 2024,” said Michael Hunter, VP of Epiq AACER. “I expect a strong demand in individual filings ahead of us, especially considering the large increase in commercial filings, consumer debt levels, high interest rates, and overall increased costs with relatively flat household income. The timeframe from the onset of individual financial stress to a bankruptcy filing is generally six to 18 months.”

Overall bankruptcy filings, including both commercial and individual cases, painted a grim picture of financial distress across the nation. Total bankruptcy filings reached 251,012 in the first half of 2024, marking a notable 15% surge from the 217,483 filings reported a year earlier. Individual filings mirrored this trend with a similar 15% increase, totaling 235,878 in the first six months of 2024 compared to 205,301 in the same period in 2023.

Among individual filings, chapter 13 bankruptcies also showed a notable rise. The 93,873 filings under chapter 13 during the first half of 2024 represented a 10% increase over the 85,395 filings seen in the first half of 2023.

“The continued increase in bankruptcy filings reflects the growing economic strain on businesses and households,” said ABI Executive Director Amy Quackenboss. “We hope that efforts continue on Capitol Hill to reinstate higher debt-eligibility limits for small businesses and chapter 13 filers to create greater access and a more efficient process for small businesses and families to achieve a financial fresh start.”

The surge in bankruptcy filings comes amidst legislative challenges affecting bankruptcy thresholds. A statutory sunset on June 21, 2024, resulted in reduced debt limits for bankruptcy eligibility. The enhanced subchapter V debt limit, initially set at $7,500,000, dropped to $3,024,725, while the chapter 13 threshold for secured and unsecured debt reverted to lower limits, impacting eligibility for small businesses and consumers alike.

Senator Richard Durbin (D-Illinois), alongside bipartisan colleagues, introduced legislation (S. 4150) in April 2024 aimed at extending these enhanced limits for subchapter V elections and chapter 13 filers by two years. Despite the setback caused by the sunset provision, Senator Durbin has vowed to persist in efforts to restore broader access for small businesses and individuals seeking bankruptcy protection.

The American Bankruptcy Institute’s Subchapter V Task Force, in its Final Report and recommendations to Congress, has advocated for a reinstatement of the higher eligibility limits, emphasizing the need to support small businesses burdened by financial distress.

As economic uncertainties persist and legislative battles unfold, the trajectory of bankruptcy filings will continue to be closely monitored as a barometer of the nation’s economic health and resilience.

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Kyle G. Horst

Kyle G. Horst is a reporter for MortgagePoint. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at
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