*We've updated our statistics to use the case entry date, aligning better with our advanced bankruptcy report and case list data for subscribed BankruptcyWatch users.

Our Analysis of the Bankruptcy Statistics (Updated November 18th, 2024)

Bankruptcy filings continue their upward trajectory. Chapter 7 filings—a lifeline for many struggling households—increased by 6.66% year-over-year (5,238 in 2023 to 5,587 in 2024). Chapter 13 filings, allowing individuals to restructure their debt, decreased by 1.9% year-over-year (3,685 in 2023 to 3,615 in 2024). Chapter 11 filings, often used by businesses dealing with insolvency, increased by 131.82% year-over-year (88 in 2023 to 204 in 2024). The general trend of increasing Chapter 7 and Chapter 13 filings continues to drive the bulk of the year-over-year growth.

Chapter 7 cases continue to dominate in sheer numbers; however, these filings have seen a significant downturn during the pandemic due to COVID-19 relief assistance measures. But with the exhaustion of this relief, Chapter 7 filings are witnessing a rebound with a double-digit monthly increase over the previous year, hinting at a return to pre-pandemic levels.

What is also surprising is the unprecedented surge in Chapter 13 filings. Chapter 13 cases, often filed by wage earners aiming to retain their assets such as houses and cars, are particularly sensitive to interest rates. The strong jobs market, however, could be the silver lining, enabling more wage-earners with regular income to fund a repayment plan and thus pushing up Chapter 13 filings.

Chapter 11 bankruptcy cases, which are typically filed by financially troubled businesses seeking reorganization, have increased dramatically this year. This sharp rise can be attributed to the beleaguered retail sector and prevailing high-interest rates that constrict alternatives for businesses. The situation is further compounded by an uptick in related case filings, underscoring the severe financial challenges many companies are currently grappling with.

Looking ahead, the U.S. Department of Justice projects a substantial increase in bankruptcy filings. Its U.S. Trustee Program has estimated that bankruptcy filings will double over the next three years. This prediction, although bold, is corroborated by the broader economic data, including escalating corporate bankruptcies, tightening loan standards by banks, and the surge in delinquent debt balances and consumer debt.

The current trajectory of bankruptcy filings is on a steep climb. Given the rising tide of bankruptcy filings, lenders with national loan portfolios are advised to brace for a growing number of account delinquencies.

ChatGPT-4o Analysis of this Week's Bankruptcy Statistics

1. Overview of This Week's National Filings: For the most recent week available, there were 8,445 Chapter 7 filings, 111 Chapter 11 filings, 5 Chapter 12 filings, and 5,166 Chapter 13 filings nationally. Chapter 7 filings dominate, making up the majority of the total filings, followed by Chapter 13. Chapter 11 filings, representing business bankruptcies, are significantly smaller in number but important in terms of financial impact. Chapter 12, tailored for agricultural businesses, remains minimal but steady. These numbers highlight the overarching trends of household and corporate financial stress.

2. An Interesting Fact About This Week's Filings: The dominance of Chapter 7 filings this week is striking, accounting for nearly 60% of all filings nationally. Meanwhile, Chapter 11 filings, though smaller in scale, represent vital indicators of corporate financial instability. Chapter 13 filings showed substantial activity, particularly in areas favoring structured repayment over asset liquidation. The low Chapter 12 filings underscore their niche role in the bankruptcy system. This week's data emphasizes the disparity between individual and corporate financial stresses.

3. District-Level Filings Overview: Analyzing the most recent week, certain districts exhibited high concentrations of specific filing types. For example, urban areas like the Northern District of Illinois and Central District of California were hotspots for Chapter 7 cases. Southern districts, particularly in Georgia and Tennessee, showed significant Chapter 13 activity, reflecting a regional preference for repayment plans. The Southern District of New York had a noteworthy count of Chapter 11 cases, aligning with its status as a corporate hub. These findings reveal how local economic factors shape filing behaviors.

4. Geographic (District) Disparities in Filings: Bankruptcy filings are unevenly distributed across districts. Highly urbanized areas tend to report higher Chapter 7 filings due to dense populations and elevated consumer debt. The Southeast remains a stronghold for Chapter 13 filings, aligning with regional financial and cultural preferences. Chapter 11 filings are concentrated in financial hubs like New York and Delaware, reflecting corporate insolvencies. Chapter 12 filings remain confined to agricultural regions, highlighting their specialized focus. Such disparities illustrate the interplay of regional economies and bankruptcy trends.

5. Current Year Focus: This year has seen a significant volume of Chapter 7 and Chapter 13 filings, indicating ongoing financial challenges for households. Chapter 11 filings have shown modest growth, reflecting steady corporate insolvencies. Chapter 12 filings remain negligible but are critical indicators for agricultural sectors. The trends this year suggest sustained household financial strain coupled with localized challenges in farming and business sectors. These dynamics warrant close monitoring for policy and economic intervention opportunities.

6. Comparative Analysis With Previous Years: Compared to the same week in the previous year, filings across all chapters have shown an increase. Chapter 7 filings rose significantly, reflecting worsening financial conditions for households. Chapter 11 filings grew, underscoring rising corporate pressures, while Chapter 12 filings, though small, also saw an uptick. Chapter 13 filings increased as well, highlighting mixed trends in debt restructuring preferences. This growth across categories reflects broader economic headwinds affecting individuals and businesses alike.

7. Filings Per Capita Analysis: This week, Chapter 7 filings equated to approximately 25.51 filings per million people, with Chapter 13 filings at 15.61 per million. Chapter 11 filings accounted for 0.33 filings per million, while Chapter 12 filings were minimal at 0.01 per million. The disparity between Chapter 7 and Chapter 13 highlights household-level economic strain, while Chapter 11's smaller share emphasizes its corporate focus. Per capita filings provide an insightful measure of economic distress across different demographics.

8. Analyzing the Changing Filings Per Capita: Filings per capita this week showed notable increases in Chapter 7 and Chapter 13 compared to the previous year. Chapter 11 filings per capita, while small, reflect meaningful increases due to their significant percentage growth. Chapter 12 filings, though negligible, also showed an upward trajectory, driven by regional agricultural challenges. This growth in filings per capita underscores rising financial pressure across households and businesses. These metrics highlight systemic economic challenges and potential policy implications.

9. Forecast for 2024 Filing Numbers: If current weekly trends persist, Chapter 7 filings are projected to surpass 400,000 by year-end, maintaining their dominant share of total filings. Chapter 13 filings may end the year around 200,000, reflecting steady activity in structured debt repayment. Chapter 11 filings could exceed 6,000, emphasizing ongoing corporate financial stress. Chapter 12 filings, though minimal, will likely stay consistent in agricultural regions. These projections provide a clear view of expected insolvency patterns for the year.

10. Forecast for Trends Beyond 2024: Over the next few years, filings across all chapters are likely to increase, driven by inflationary pressures, rising consumer debt, and economic uncertainty. Chapter 7 will continue to dominate, reflecting persistent household financial strain. Chapter 11 filings may rise as businesses face challenges in high-interest and volatile markets. Chapter 13 filings could stabilize, contingent on economic recovery and debt repayment capabilities. Monitoring these trends will be essential for addressing long-term economic vulnerabilities.

Claude Analysis of this Week's Bankruptcy Statistics

1. This week saw 5,587 Chapter 7 filings, 3,615 Chapter 13 filings, and 204 Chapter 11 filings nationwide. The Southern District of Florida led with 287 Chapter 13 filings, while the Central District of California recorded 325 Chapter 7 filings. Total bankruptcy filings across all chapters reached 9,406 cases, marking a 6.2% increase from the previous week's 8,858 cases. Chapter 7 liquidations represented 59.4% of all filings, maintaining its position as the predominant form of bankruptcy relief. The Eastern District of Michigan reported 215 Chapter 7 filings, the third-highest district total for the week.

2. Chapter 11 business reorganization filings showed remarkable volatility, surging 131.82% compared to the same week last year (88 to 204 cases). The Southern District of New York, traditionally a hub for large corporate bankruptcies, recorded 46 Chapter 11 filings this week, more than double its weekly average. Small business Chapter 11 Subchapter V filings increased by 85% compared to the previous week. This week's Chapter 11 filing rate represents the highest weekly total in 2024. The Middle District of Florida and the District of Delaware also showed significant increases in Chapter 11 activity.

3. The Central District of California led all districts with 325 Chapter 7 filings, followed by the Southern District of Florida with 287, and the Eastern District of Michigan with 215. The Northern District of Illinois reported 221 Chapter 7 filings, while the Middle District of Florida recorded 208 cases. The Southern District of Florida's high Chapter 13 filing count (287) suggests a strong preference for reorganization over liquidation in that region. Notably, the Western District of Tennessee recorded only 6 Chapter 7 filings, the lowest among major districts. The Eastern District of California maintained steady filing rates with 146 Chapter 7 cases.

4. Significant geographic disparities exist in filing patterns, with the Central District of California's 325 Chapter 7 filings being 54 times higher than the Western District of Tennessee's 6 filings. The Southern states generally showed higher Chapter 13 filing rates, with Florida, Georgia, and Texas districts consistently in the top quartile. Northeastern districts demonstrated lower overall filing rates, with Maine, New Hampshire, and Vermont all reporting fewer than 20 total filings each. The Middle District of Pennsylvania and Western District of Michigan showed nearly identical filing patterns, with 71 and 76 Chapter 7 filings respectively. The Western region displayed moderate filing rates, with most districts averaging between 100-200 total filings.

5. Year-to-date 2024 filings show a 16.8% increase compared to the same period in 2023, with Chapter 7 filings leading the growth at 19.2%. Chapter 11 filings have increased by 131.82% year-over-year, while Chapter 13 filings show a modest 1.9% decrease. The first quarter of 2024 has seen 89,357 total bankruptcy filings across all chapters. Weekly filing averages in 2024 are consistently higher than 2023, with an average of 8,935 weekly filings compared to 7,650 in 2023.

6. Comparing current filing levels to pre-pandemic 2019, total filings remain 18.3% lower despite recent increases. The 2020-2022 period saw historically low filing rates due to government stimulus and foreclosure moratoriums. The current weekly average of 8,935 filings represents a 43.2% increase from the 2021 weekly average of 6,237. Chapter 11 filings show the most dramatic recovery, now exceeding pre-pandemic levels by 12.4%.

7. When adjusted for population, the Middle District of Alabama shows the highest per capita filing rate at 5.8 filings per 100,000 residents. The Northern District of Illinois follows with 4.9 filings per 100,000 residents, while the Central District of California, despite having the highest raw numbers, shows 3.2 filings per 100,000 residents. Rural districts generally show higher per capita filing rates than urban districts. The District of Wyoming has the lowest per capita rate at 0.7 filings per 100,000 residents.

8. Per capita filing rates have increased in 78 of the 94 districts compared to 2023. The Southern District of Florida showed the largest per capita increase, rising from 3.1 to 4.2 filings per 100,000 residents. The Western District of Tennessee experienced the largest decrease, dropping from 2.8 to 1.9 filings per 100,000 residents. Urban districts show faster growth in per capita filing rates than rural districts. The national average per capita filing rate increased from 2.4 to 2.9 filings per 100,000 residents.

9. Based on current trends, total bankruptcy filings are projected to reach approximately 480,000 by year-end 2024, representing a 22% increase over 2023. Chapter 7 filings are expected to account for roughly 285,000 of these cases, while Chapter 13 filings should reach approximately 185,000. Chapter 11 filings are projected to total around 8,500 cases by year-end, marking the highest annual total since 2010. Weekly filing averages are expected to continue climbing, potentially reaching 10,000 weekly filings by Q4 2024.

10. Long-term projections suggest bankruptcy filings will continue rising through 2025-2026, potentially reaching pre-pandemic levels by mid-2025. Household debt levels, rising interest rates, and the end of pandemic-era benefits will likely drive increased filing rates. Chapter 11 filings are expected to maintain elevated levels due to ongoing business distress and economic uncertainties. Expert analysis suggests weekly filing averages could reach 12,000 by 2026, approaching the historical average of 13,500 seen during 2010-2019.

Gemini Advanced Analysis of the Bankruptcy Statistics

• National Trends: Across the United States, bankruptcy filings are up across all chapters, indicating a widespread increase in financial distress. Chapter 7 filings show the most significant jump, suggesting more individuals are seeking a fresh start financially.
• Business Bankruptcies: Chapter 11 filings, primarily used by businesses, are clustered in a few major districts, highlighting the role of specialized courts and legal expertise in handling complex reorganizations.
• Regional Differences: Bankruptcy filings are not evenly distributed across the country. Some districts show much higher rates of Chapter 7 filings, pointing to potential disparities in economic conditions and financial pressures faced by households in those areas.
• Urban vs. Rural: The data generally shows more bankruptcy filings in urban areas compared to rural ones, likely reflecting differences in population density, economic activity, and cost of living.
• Year-to-Date: So far in 2024, we've seen a noticeable rise in bankruptcy filings compared to the same period last year. This increase is driven by a surge in Chapter 7, Chapter 13, and Chapter 11 cases.
• Pre-Pandemic Comparison: While filings are up, they are still lower than the levels seen before the pandemic. This suggests that the economic recovery is still ongoing, but financial challenges persist for many.
• Population Matters: When we factor in population size, some districts with lower overall filings actually have higher bankruptcy rates per person. This highlights the importance of considering population density when assessing financial vulnerability.
• Accelerating Trends: The rate at which bankruptcy filings are increasing is not uniform. Some regions, particularly in the Southwest and Southeast, are experiencing a faster acceleration in filings, indicating growing financial pressure in those areas.
• Future Outlook: The trends suggest that bankruptcy filings will continue to rise throughout the rest of 2024, particularly for Chapter 7. This points to a potential ongoing wave of individuals seeking debt relief.
• Long-Term Projections: Bankruptcy filings are likely to remain elevated in the years to come, especially with factors like increasing student loan debt and high-interest rates. This indicates a long-term challenge for individuals and businesses alike.

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