According to a new report form Epiq, bankruptcies increased at a rate of 24% year-over-year to a total of 40,628 in October, up from 32,707 filings during the same period last year.
More notably, there were 631 commercial bankruptcies during the month—an incredible increase of 106% year-over-year—compared to the 306 filed last year.
Overall commercial filings increased 14% to 2,188 in October 2023, up from the 1,916 commercial filings registered in October 2022. Small business filings, captured as subchapter V elections within chapter 11, increased 47% to 176 in October 2023, up from 120 in August 2022.
Individual bankruptcies totaled 38,440 filings, a 25% increase year-over-year when 30,791 were filed.
There were 22,473 individual chapter 7 filings in October 2023, a 31 percent increase over the 17,125 filings recorded in October 2022, and there were 15,901 individual chapter 13 filings in October 2023, a 17 percent increase over the 13,618 filings in October the previous year.
“As emergency funding from the government, lender forbearance, and lower borrowing costs helped to decrease filings during the COVID-19 pandemic, bankruptcies have steadily increased following the sunset of government funding, interest rates increases, inflation growth, and tightening lending standards,” said Todd Madsen, AACER Vice President. “October marks 15 consecutive months that total, individual, and commercial bankruptcy filings have registered monthly year-over-year increases.”
“Increased prices for goods and services, along with higher borrowing costs, add to the economic challenges faced by distressed families and businesses,” said ABI Executive Director Amy Quackenboss. “Bankruptcy provides a proven process for struggling consumers and companies to alleviate their intensifying debt loads and a chance for a financial fresh start.”
Click here for the entire report.