ALEXANDRIA, Va. –
At least initially, federal government intervention to help individuals and business hit financially by the coronavirus pandemic have made a positive impact in terms of bankruptcy filings.
But experts suspect conditions will deteriorate in this part of the financial world as those assistance packages expire.
According to data provided by Epiq, the American Bankruptcy Institute (ABI) reported that the 39,969 total bankruptcy filings in May were down 42% from the 68,860 total filings in May of last year.
ABI also pointed out the total consumer filings decreased 43% in May, as the 37,391 filings fell from the 65,302 consumer filings registered last May.
Meanwhile, Epiq’s data also showed total commercial filings declined 28% in May, as the 2,578 filings were down from the 3,558 commercial filings completed in May of last year.
“Companies that tried to shore up their balance sheets at the beginning of the year represent the initial wave of chapter 11s due to the economic crisis brought about by the COVID-19 pandemic,” ABI executive director Amy Quackenboss said in a news release.
“The CARES Act and other swift government measures have been successful in keeping consumers afloat during the crisis,” Quackenboss continued. “As this relief runs its course, however, mounting financial challenges may result in more households and companies seeking the shelter of bankruptcy.”
Looking at a sequential comparison, ABI noted total bankruptcy filings in May constituted a 4% increase over the 38,444 total filings recorded in April. Total noncommercial filings for May also marked a 3 percent increase from the April noncommercial filing total of 36,151.
Officials said the average nationwide per capita bankruptcy filing rate in May came in at 1.98 (total filings per 1,000 per population), a decrease from the 2.09 filing rate during the first four months of the year.
Average total filings per day in May stood at 1,998, a 36% decrease from the 3,130 total daily filings in May of last year.
ABI shared that states with the highest per capita filing rates (total filings per 1,000 population) in May included:
1. Alabama (4.66)
2. Tennessee (4.05)
3. Delaware (3.90)
4. Mississippi (3.64)
5. Georgia (3.45)
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.