ALEXANDRIA, Va. –
While overall bankruptcies remain lower year-over-year, a rise in a portion of commercial filings during July has the leader of the American Bankruptcy Institute (ABI) concerned about what might be happening later this year.
According to data provided by Epiq, ABI said total commercial Chapter 11 filings in July 2020 increased 52% from the previous year. Officials determined commercial Chapter 11 filings totaled 643 in July, climbing from the July 2019 total of 423.
Conversely, ABI found that total commercial filings decreased 17% in July 2020, as the 2,768 filings were down from the 3,314 commercial filings registered in July of last year.
Officials pointed out the 42,861 total bankruptcy filings in July 2020 were down 33% from the 64,345 total filings registered last July. They added total consumer filings dropped 34% in July, as the 40,093 filings fell from the 61,031 consumer filings posted in July of last year.
When looking at the data on a sequential comparison, the increases are more prevalent.
ABI indicated July’s commercial Chapter 11 filings represented a 6% increase from the 609 filings in June. The organization said total commercial filings ticked up 2% above the June commercial filing total of 2,713.
And officials went on to say that total bankruptcy filings in July represented a 1% increase over the 42,425 total filings recorded in June. And total noncommercial filings for July also marked a 1% rise from the June 2020 noncommercial filing total of 39,712.
“As the government considers renewing or bolstering lifelines to help stabilize the economy, the financial uncertainty due to the COVID-19 pandemic is weighing on families and businesses,” ABI executive director Amy Quackenboss said in a news release.
“We anticipate filings increasing in the next few months as more households and companies seek the shelter of bankruptcy amid intensifying financial distress,” Quackenboss continued.
ABI acknowledged Congress is currently considering another economic stimulus package as important aid provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) have expired.
Officials reiterated the weekly unemployment bonus of $600 established by the CARES Act ended on July 31, and the deadline for businesses to apply for a Paycheck Protection Program loan was Saturday.
Turning back to the latest data, ABI mentioned the average nationwide per capita bankruptcy filing rate in July came in at 1.89 (total filings per 1,000 per population), a slight decrease from the filing rate of 1.92 during the first six months of 2020.
Officials added average total filings per day in July were 1,948, a 33% decrease from the 2,925 total daily filings in July 2019.
States with the highest per capita filing rates (total filings per 1,000 population) in July included:
1. Alabama (4.31)
2. Tennessee (3.75)
3. Delaware (3.70)
4. Mississippi (3.35)
5. Georgia (3.12)
ABI has partnered with Epiq, a leading provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.