January experienced the lowest monthly number of new bankruptcy filings across all chapters since February 2006 (26,617 filings) with only 32,298 filings, according to a press release from Epiq, a tech-enabled provider of intel to the legal services industry and corporations, released its January 2021 bankruptcy filing statistics from its AACER bankruptcy information services business.
This ongoing slide represents a decrease of 6% over December 2020 filings and a 44% decrease over January 2020 filings where there were 58,161 new cases.
“Out of court solutions, available liquidity, and general uncertainty has caused a significant pause in Chapter 11 filings this past month,” said Deirdre O’Connor, Senior Managing Director of Corporate Restructuring at Epiq. “We appear to be suspended in an air bubble at the moment.”
“The new year data continues to show extreme softness in new U.S. bankruptcy filings,” said Chris Kruse, SVP of Epiq AACER. “The optimism around a new political administration and potential new government relief for consumers has kept new filings historically low.”
According to the report, Chapter 13 non-commercial filings are down 4% over last month with only 8,972 new cases. Chapter 7 non-commercial filings are also down 6.5% in January 2021 with only 21,225 new cases. With unemployment rates in December holding steady at 6.7%, pressure on consumers has stabilized and renewed confidence on stimulus aid is rising.
“We continue to expect new filings will grow substantially in the second half of 2021, notwithstanding any likely short-term stimulus,” said Kruse.
Epiq's AACER bankruptcy information services platform is built with advanced data, technology to create insight and mitigate risk for businesses impacted by bankruptcies.
The company offers complimentary bankruptcy statistics and monthly email updates for both commercial and non-commercial (consumer) bankruptcy filings for Chapter 7, Chapter 11, and Chapter 13 cases.
Registration for these free resources is available on its Bankruptcy Statistics and Trends page.