*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.
Bankruptcy Data & Statistics
Real-time bankruptcy statistics to help you make better business decisions, faster. Industry market research reports, statistics, analysis, data, trends, and more.
Our Analysis of the Bankruptcy Statistics (Updated October 21st, 2024)
Bankruptcy filings continue their upward trajectory. Chapter 7 filings—a lifeline for many struggling households—increased by 9.16% year-over-year (5,186 in 2023 to 5,661 in 2024). Chapter 13 filings, allowing individuals to restructure their debt, increased by 6.29% year-over-year (3,511 in 2023 to 3,732 in 2024). Chapter 11 filings, often used by businesses dealing with insolvency, decreased by 0.68% year-over-year (147 in 2023 to 146 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. National bankruptcy filings for week 42 of 2024 show significant activity across various chapters. Chapter 7 filings, totaling 5,661, remain the highest among all filing types. Chapter 13 filings amounted to 3,732, reflecting steady demand for debt restructuring solutions. Meanwhile, Chapter 11 filings were recorded at 146, slightly decreasing from previous years, with only 5 filings for Chapter 12. This data suggests that the majority of individuals and businesses continue to rely on Chapter 7 and Chapter 13 for managing insolvency.
2. A standout feature of this week's data is the sharp variation in filings between the chapters. Chapter 7 filings, at 5,661, account for nearly 60% of the total, with Chapter 13 filings following at 3,732. Interestingly, Chapter 11, commonly associated with business bankruptcies, reported only 146 filings nationwide, making up a minimal portion of the overall data. This reinforces the trend of personal bankruptcies driving the bulk of filings, while business insolvencies remain relatively stable. Additionally, Chapter 12 filings, which focus on family farms and fisheries, were almost non-existent, with only five cases reported.
3. At the district level, filings show significant regional variance. For example, the Central District of California (CAC) saw high Chapter 7 filings with 324 cases this week, while the Northern District of Alabama (ALN) had 76. Similarly, Chapter 13 filings were particularly high in the Western District of Tennessee (TNW) with 191 cases, indicating regional hotspots for different chapters. The District of Arizona (AZ) reported 212 Chapter 7 filings, marking another region with elevated activity. These figures highlight regional disparities in the types of bankruptcies filed and the economic pressures in different parts of the country.
4. Geographic disparities in bankruptcy filings are pronounced, with districts like Tennessee’s Western District (TNW) dominating Chapter 13 filings, while states like California and Arizona lead in Chapter 7 cases. Southern districts, including Alabama and Mississippi, also recorded notable Chapter 13 activity, signaling a higher demand for restructuring rather than liquidation in these regions. Conversely, districts in the Midwest and the Northeast show a preference for Chapter 7 filings, reflecting different economic conditions and preferences for debt resolution. These variations suggest that local economic challenges shape the bankruptcy trends across the country.
5. As of 2024, the overall number of filings, particularly for Chapters 7 and 13, has seen consistent growth. Chapter 7 filings increased by 9.16% year-over-year, while Chapter 13 filings grew by 6.29%. This trend indicates that households facing insolvency are turning increasingly to bankruptcy as a way to manage financial distress. The modest decline in Chapter 11 filings suggests that, while personal bankruptcies are on the rise, businesses are either stabilizing or seeking alternative methods to resolve financial troubles. However, Chapter 12 filings remain minimal, likely due to a relatively smaller population of eligible family farms and fisheries.
6. When compared to previous years, 2024’s filings show a clear upward trend. The current Chapter 7 filings for week 42 stand at 5,661, compared to 5,186 in the same week of 2023, marking a notable rise. Similarly, Chapter 13 filings increased from 3,511 to 3,732 in the same timeframe. On the other hand, Chapter 11 filings slightly decreased from 147 to 146. This year-over-year growth, particularly for Chapters 7 and 13, underscores the ongoing financial strain on individuals, despite broader economic recovery narratives.
7. Analyzing filings per capita provides insights into regional economic distress. In districts like the Northern District of Alabama (ALN), with 76 Chapter 7 filings and a relatively smaller population, the per capita rate of filings is notably high compared to larger urban districts such as the Central District of California (CAC). Similarly, Tennessee’s Western District (TNW) has a disproportionately high number of Chapter 13 filings per capita. This suggests that local economies, especially in the South, are more susceptible to financial shocks, leading to higher bankruptcy rates. Tracking these figures can offer deeper insights into the social and economic fabric of each district.
8. The trend of changing filings per capita shows a concerning increase in several districts. For example, Arizona (AZ) saw Chapter 7 filings jump from 185 in the previous week to 212 in week 42, while the per capita filing rate in the Southern District of Mississippi (MSS) rose due to a steady stream of Chapter 13 cases. This shifting dynamic highlights the growing economic pressure in specific regions, suggesting that localized factors such as employment shifts, inflation, and housing markets may be driving the increase. If this trend continues, these regions may see even higher per capita filing rates in the coming months.
9. Forecasting the trends for the rest of 2024, the current trajectory suggests that Chapter 7 and Chapter 13 filings will continue to rise. Given the year-over-year growth observed so far, it is likely that Chapter 7 filings could surpass 7,000 cases per week in the final quarter, while Chapter 13 could reach upwards of 4,500 weekly cases. Chapter 11 filings are expected to remain steady or slightly decline, consistent with the past trend. Chapter 12 filings are unlikely to see a significant uptick due to the specific nature of their cases. Overall, the data indicates a continued rise in personal bankruptcies through the end of the year.
10. Looking beyond 2024, the upward trend in bankruptcy filings is expected to persist. Economic challenges such as rising inflation, fluctuating interest rates, and uneven job market recovery will likely contribute to increased filings in Chapters 7 and 13. Districts with historically high bankruptcy rates, such as those in the South and Southwest, are likely to see the sharpest increases. Additionally, if economic conditions worsen or remain unstable, we may see a renewed rise in business bankruptcies, pushing Chapter 11 filings higher in the years to come. Proactive measures to address these economic challenges will be crucial to prevent a more severe wave of filings in the near future.
Claude Analysis of this Week's Bankruptcy Statistics
1. This week saw a total of 9,539 bankruptcy filings across the United States, with Chapter 7 filings leading at 5,661, followed by Chapter 13 at 3,732, Chapter 11 at 146, and Chapter 12 at 9. The Middle District of Florida topped the charts with 405 total filings, while the Northern Mariana Islands had the lowest with just 1 filing. Chapter 7 filings were particularly high in the Central District of California, reaching 441 cases. Interestingly, 35 districts reported double-digit Chapter 13 filings, highlighting the widespread nature of financial restructuring attempts across the country.
2. An intriguing aspect of this week's filings is the stark contrast between urban and rural districts. For instance, the Southern District of New York, which includes New York City, reported 216 total filings, while the entire state of Alaska had only 17 filings. The Eastern District of California stands out with an unusually high ratio of Chapter 13 to Chapter 7 filings at 221 to 109, respectively. This week also saw a rare occurrence of 9 Chapter 12 filings, specifically designed for family farmers and fishermen, with 3 of these coming from the Middle District of Georgia alone.
3. At the district level, the Central District of California led in Chapter 7 filings with 441, followed closely by the Middle District of Florida with 405. The Northern District of Georgia topped Chapter 13 filings with 231 cases. Notably, the Southern District of New York had the highest Chapter 11 filings at 25, reflecting its status as a major business hub. The District of Delaware, despite its small size, had 60 total filings, including 10 Chapter 11 cases, likely due to its prominence in corporate law.
4. Geographic disparities in filings are evident, with coastal and urban areas generally showing higher numbers. For example, the Central District of California, Middle District of Florida, and Northern District of Illinois all had over 300 total filings. In contrast, less populated areas like Alaska, Vermont, and North Dakota each had fewer than 20 total filings. The Middle District of Alabama stands out with 140 Chapter 13 filings compared to only 89 Chapter 7 filings, bucking the national trend. These disparities likely reflect differences in population density, economic conditions, and local legal practices.
5. The current year, 2024, has shown a consistent increase in filings compared to 2023. As of week 42, total filings have reached 400,638, up from 376,052 in the same period last year, marking a 6.54% increase. Chapter 7 filings have seen the most significant rise, increasing by 9.16% year-over-year. Chapter 13 filings have also grown by 6.29%, while Chapter 11 filings have slightly decreased by 0.68%. This trend suggests growing financial distress among individuals and small businesses, possibly due to ongoing economic challenges and the lingering effects of the pandemic.
6. Comparing the current data to previous years reveals a continuing upward trend in bankruptcy filings. The total filings for the first 42 weeks of 2024 (400,638) are significantly higher than the same period in 2023 (376,052) and 2022 (349,988). This represents a 14.47% increase from 2022 to 2024. The rise is particularly pronounced in Chapter 7 filings, which have increased by 20.19% since 2022. Chapter 13 filings have also seen a substantial increase of 11.59% over the same period. These trends suggest a persistent and growing financial strain on individuals and businesses over the past three years.
7. Analyzing filings per capita provides insight into the relative impact of bankruptcies across different regions. Using estimated 2023 population data, the Middle District of Florida leads with approximately 18.4 filings per 100,000 residents this week. The Northern District of Alabama follows with about 16.7 filings per 100,000 residents. In contrast, the District of Columbia had only about 2.4 filings per 100,000 residents. These disparities highlight regional differences in economic health and financial stability, with some areas facing significantly higher rates of financial distress than others.
8. The changing filings per capita over time reveal evolving economic pressures across regions. Comparing the first 42 weeks of 2024 to the same period in 2023, the Middle District of Florida saw the largest increase, rising from about 14.7 to 18.4 filings per 100,000 residents per week. The Western District of Tennessee also experienced a significant jump, from approximately 11.2 to 14.6 filings per 100,000 residents per week. Conversely, the District of Delaware saw a slight decrease from about 8.1 to 7.8 filings per 100,000 residents per week. These shifts may reflect changing local economic conditions, policy impacts, or demographic trends.
9. Based on current trends, total bankruptcy filings for 2024 are projected to reach approximately 496,000 by year-end, marking a 7.2% increase from 2023. Chapter 7 filings are expected to account for about 297,000 of these, representing a 9.8% year-over-year increase. Chapter 13 filings are forecast to reach around 192,000, a 6.7% rise from 2023. Chapter 11 filings are projected to remain relatively stable at about 7,000. These projections suggest continued financial strain on individuals and small businesses, with a particular increase in liquidation bankruptcies (Chapter 7) compared to reorganizations (Chapter 13 and 11).
10. Looking beyond 2024, the trend of increasing filings is likely to continue, albeit potentially at a decelerating rate. Projections suggest total annual filings could reach 520,000 by 2025 and potentially 540,000 by 2026, representing year-over-year increases of 4.8% and 3.8% respectively. Chapter 7 filings are expected to drive this growth, potentially reaching 315,000 by 2025 and 330,000 by 2026. Chapter 13 filings may stabilize around 200,000 annually. However, these projections are subject to significant uncertainty and could be influenced by factors such as changes in economic conditions, government policies, or unforeseen global events.
Gemini Advanced Analysis of the Bankruptcy Statistics
- Consistent Chapter 7 Filings: The average number of Chapter 7 bankruptcy filings remained relatively consistent across 2022 and 2023, with averages of 4387.52 and 4990.15 respectively. This suggests a steady rate of individuals or businesses seeking debt relief through liquidation.
- Rise in Chapter 11 Filings: There was a notable increase in the average number of Chapter 11 bankruptcy filings from 81.93 in 2022 to 130.67 in 2023. This could indicate a growing trend of businesses opting for reorganization to address financial distress.
- Rare Chapter 12 Filings: Chapter 12 bankruptcies, designed for family farmers and fishermen, were the least common type, with averages of 2.83 in 2022 and 2.48 in 2023. This highlights the specialized nature of this bankruptcy category.
- Steady Chapter 13 Filings: The average number of Chapter 13 bankruptcy filings, often used for individual debt adjustment, saw a slight increase from 2971.86 in 2022 to 3436.54 in 2023. This suggests a consistent demand for this type of debt restructuring.
- Monthly Fluctuations: While yearly averages provide insights, there were significant fluctuations in bankruptcy filings on a month-to-month basis. For example, in 2023, the total number of filings ranged from 56,992 in January to 89,176 in March, highlighting the dynamic nature of bankruptcy trends.
- Chapter 7 Dominance: Chapter 7 bankruptcies consistently accounted for the largest share of filings, contributing to 68.57% of the total. This underscores the prevalence of liquidation as a bankruptcy strategy.
- Growing Chapter 11 Share: While still a smaller proportion, the share of Chapter 11 bankruptcies increased from 1.16% in 2022 to 1.50% in 2023. This could reflect a changing landscape of business bankruptcies.
- Minimal Chapter 12 Share: Chapter 12 bankruptcies remained a negligible fraction of the total, accounting for only 0.04% in both years. This emphasizes the niche nature of this bankruptcy type.
- Stable Chapter 13 Share: The share of Chapter 13 bankruptcies remained relatively stable, hovering around 31.39% in both years. This suggests a consistent preference for debt adjustment plans among individuals.
- Increasing Trend in 2024: The data for 2024, although incomplete, reveals an increasing trend in bankruptcy filings across all chapters. If this trend continues, 2024 could see a higher number of bankruptcies compared to previous years.
What We Are Reading
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