Bankruptcy Filings Increase Across All Chapters in First Quarter 2024
April 3, 2024
Source: Epiq
Commercial Chapter 11s Up 43 Percent
NEW YORK/ALEXANDRIA, VA – April 2, 2024 – New bankruptcy filings during the first calendar quarter of 2024 (Jan. 1 through March 31) registered year-over-year increases across all U.S. major filing categories, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data.
Total commercial chapter 11 filings (including subchapter V) registered the largest increase, as the 1,894 filings during the first quarter of 2024 were up 43 percent from the 1,325 total commercial chapter 11s during the same period in 2023. Total overall commercial bankruptcies increased 22 percent in the first quarter of 2024, as the 7,113 filings surpassed the 5,820 commercial filings during the first quarter of 2023. Subchapter V elections for small businesses increased 30 percent to 606 filings in Q1 2024 from the 465 filed during Q1 2023.
The 120,094 total bankruptcy filings represented a 14 percent increase from the 105,497 total filings during the same period last year. Consumer filings increased 13 percent, to 112,981 filings in the first quarter of 2024 from the 99,677 consumer filings during the same period in 2023. Individual chapter 7 filings during the first quarter of 2024 were 66,861, a 17 percent increase over the 57,158 individual chapter 7 filings during the same period in 2023. Individual chapter 13 filings during the first quarter of 2024 were 45,958, a 9 percent increase over the 42,362 individual chapter 13 filings in the same period of 2023.
“As we expected, the upward trajectory in both commercial and individual related bankruptcy filing volumes continue,” said Michael Hunter, Vice President of Epiq AACER. “March marks 20 consecutive months that total, individual, and commercial bankruptcy filings have registered monthly year-over-year increases. Factors contributing to this trend are the higher cost of funds and interest rates, a reduction in consumer discretionary spending, higher housing costs, and a continued drawdown of excess savings. These factors coupled with the post-pandemic anticipated normalization of bankruptcy volumes lead me to believe this upward trend will continue through 2024.”
New bankruptcy filings in March 2024 also registered year-over-year increases across all U.S. major filing categories. A total of 44,453 new bankruptcies were filed in March, up 5 percent from the 42,412 filings registered in March 2023.
Year-over-year commercial filings were up 3 percent to 2,434 compared to 2,372 in March 2023. Commercial chapter 11 filings (including subchapter V) increased 6 percent to 605 versus the 570 filings registered the previous March. Subchapter V elections in March represented the largest monthly increase, as the 217 filings were up 50 percent over the 145 filings in March 2023.
Total individual filings increased 5 percent in March 2024 to 42,019 vs. 40,040 in March 2023. Year-over-year individual chapter 7 filings increased 7 percent to 26,124 vs. 24,455 in March 2023, and individual chapter 13 filings were up 2 percent to 15,844 vs. 15,532 in March 2023.
“Bankruptcy is an indispensable tool for distressed consumers and businesses aiming to repair their balance sheets in this challenging economic environment,” said ABI Executive Director Amy Quackenboss. “As the expanded eligibility limit that enabled more struggling small businesses to reorganize under subchapter V is set to expire in June, ABI's Subchapter V Task Force will soon be releasing its Final Report urging Congress to extend or permanently maintain the increased limit, allowing more small businesses to successfully restructure, reduce liquidations and save jobs.”
The debt eligibility limit of $7.5 million for small businesses looking to elect subchapter V reorganization under chapter 11 is due to sunset back to $2,725,625 in late June. ABI's Subchapter V Task Force will present its final report and recommendations at the 2024 ABI Annual Spring Meeting on April 19 in Washington, D.C. The Task Force on Dec. 15, 2023, transmitted its “Preliminary Report of ABI’s Subchapter V Task Force on Maintaining the $7,500,000 Debt Cap for Subchapter V Eligibility” to Congress, and its findings support permanently maintaining the eligibility limit of $7.5 million in aggregate noncontingent, liquidated debt for small businesses looking to reorganize under subchapter V.
Epiq Bankruptcy is a division of Epiq and is the leading provider of data, technology, and services for companies operating in the business of bankruptcy. Its Bankruptcy Analytics subscription service provides on-demand access to the industry’s most dynamic bankruptcy data, updated daily. Learn more at https://bankruptcy.epiqglobal.com.
About Epiq
Epiq, a global technology-enabled services leader to the legal industry and corporations, takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at https://www.epiqglobal.com.
About ABI
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.
Press Contacts
Carrie Trent
Epiq, Director of Communications
Carrie.Trent@epiqglobal.com
John Hartgen
ABI, Public Affairs Officer
jhartgen@abi.org