According to data provided by Epiq AACER, a provider of bankruptcy filing data, total individual Chapter 7 filings in November 2024 stood at 22,886, a 14% increase over the 20,149 filings recorded in November 2023.
Total bankruptcy filings were 40,271 in November 2024, a 6% increase from the November 2023 total of 37,907. Overall individual bankruptcy filings registered a 7% year-over-year increase, as the 37,826 filings in November 2024 represented an increase over the 35,446 individual bankruptcy filings in November 2023. The 14,858 individual Chapter 13 filings in November 2024, however, represented a 3% decrease from the 15,241 filings the previous November.
“The velocity of new filings in November 2024 was down slightly from prior months, as expected, due to fewer business days and the holiday season,” said Michael Hunter, VP of Epiq AACER. “The recent rise of default rates in consumer loans, particularly credit cards and auto loans, reflect continued financial stress among households. We anticipate the velocity of new filings to increase once the holiday season concludes and expect the new administration’s planned regulatory changes to influence filings into 2025.”
Overall commercial filings decreased 1% to 2,445 in November 2024, down from the 2,461 commercial filings registered in November 2023. Small business filings, captured as Subchapter V elections within Chapter 11, increased 28% to 206 in November 2024, up from 161 in November 2023. November commercial Chapter 11 filings were 680, a decrease of 22% from the 865 filings registered in November 2023.
“Elevated interest rates, tougher lending terms and increased geopolitical tensions continue to impact the balance sheets of many struggling businesses and families,” said American Bankruptcy Institute (ABI) Executive Director Amy Quackenboss. “While still below the levels recorded prior to the pandemic, the steady growth in filings reflects the growing financial challenges faced by distressed companies and consumers.”
Most categories of bankruptcy filings typically drop from October to November due to fewer business days and the Thanksgiving holiday in November. Total and consumer bankruptcies both decreased 15% when compared to their respective October filing totals of 47,114 for total filings and 44,515 for consumer filings. Individual Chapter 7s decreased 16%, and Chapter 13s decreased 13%, from October’s filings. Overall commercial filings decreased 7% from the 2,598 filings registered in October. Commercial Chapter 11s did increase 20% from October’s 565 filings, and Subchapter V elections within Chapter 11 increased 2% from the 201 filed in October 2024.
Impact on Housing
ATTOM, a curator of land, property data, and real estate analytics, reported that in its October 2024 U.S. Foreclosure Market Report, there were a total of 30,784 U.S. properties with foreclosure filings—default notices, scheduled auctions or bank repossessions—up 4% from a month ago, but down 11% from a year ago.
“Foreclosure activity remains challenging for U.S. homeowners, with starts and completed foreclosures up in October,” said Rob Barber, CEO of ATTOM. “As we approach 2025, the recent Fed rate cut, and the new administration could impact mortgage rates and market stability. While seasonal factors may slow things down briefly, we’ll be watching closely to see how these recent dynamics affect the market in the coming year.”
ATTOM reported that nationwide, one in every 4,578 housing units had a foreclosure filing in October 2024. States with the highest foreclosure rates were Nevada (one in every 2,741 housing units with a foreclosure filing); New Jersey (one in every 3,059 housing units); Florida (one in every 3,086 housing units); California (one in every 3,152 housing units); and South Carolina (one in every 3,272 housing units).
And according to the Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey, the total number of loans in forbearance increased to 0.47% as of October 31, 2024. According to MBA’s estimate, 235,000 homeowners were in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.4 million borrowers since March 2020.
The share of Fannie Mae and Freddie Mac (GSE) loans in forbearance increased seven basis points to 0.20% in October 2024. Ginnie Mae loans in forbearance increased by 30 basis points to 1.06%, and the forbearance share for portfolio loans and private-label securities (PLS) increased six basis points to 0.43%.
“Approximately 65,000 more borrowers are in forbearance compared to one month ago,” said Marina Walsh, CMB, MBA’s VP of Industry Analysis. “While forbearances are still low compared to the height of the pandemic, the monthly increase in forbearances is the largest since May 2020 and likely driven by the effects of Hurricanes Helene and Milton. Of those loans in forbearance, 45% are related to natural disasters, while the remaining 55% are primarily related to temporary hardship such as job loss, death, divorce, or disability. Notwithstanding the storms, some borrowers may be experiencing other economic distress. October marks the fifth consecutive month in which the forbearance rate has increased, and the performance of overall servicing portfolios and loan workouts weakened compared to this time one year ago.”
