Commercial chapter 11 bankruptcy filings soared 72% to 6,569 in calendar year 2023, according to data provided to the American Bankruptcy Institute (ABI) by Epiq AACER, a leading provider of U.S. bankruptcy filing data.
All types of bankruptcies filed by businesses and consumers increased 18% overall to 445,186 in 2023. Although that was a substantial year-over-year increase, total bankruptcy filings remained below the pre-pandemic total of 757,816 recorded in 2019, the ABI said.
“Though still below pre-pandemic figures, bankruptcies in all filing categories climbed last year amid the evaporation of pandemic emergency responses, increased interest rates and tougher lending standards,” said ABI Executive Director Amy Quackenboss on Jan. 3.
“As interest rates remain elevated, increasing geopolitical tensions weigh on global supply chains and debt loads continue to grow, struggling businesses and families can turn to the proven process of bankruptcy for a financial fresh start,” she said.
Breaking down the business data, overall commercial bankruptcy filings increased 19% to 25,627 in 2023, up from 21,479 in the previous year. Chapter 11 reorganization filings increased 72% from 3,819 in 2022 to 6,569. Subchapter V elections within chapter 11 also experienced a sharp increase (45%) in 2023 with 1,939 filings.
“We expect the increase in number of consumer and commercial filers seeking bankruptcy protection to continue in 2024 given the runoff of pandemic stimulus, increased cost of funds, higher interest rates, rising delinquency rates, and near historic levels of household debt,” said Epiq AACER Vice President Michael Hunter.
