*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 December 16th, 2024)

Bankruptcy filings continue their upward trajectory. Chapter 7 filings—a lifeline for many struggling households— were up 11.86% year-over-year (4,950 in 2023 to 5,537 in 2024). Chapter 13 filings, allowing individuals to restructure their debt, increased by 3.09% year-over-year (3,338 in 2023 to 3,441 in 2024). Chapter 11 filings, often used by businesses dealing with insolvency, decreased by -8.66% year-over-year (127 in 2023 to 116 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 week 50 of 2024, national bankruptcy filings totaled 9,096 cases across all chapters. Chapter 7 filings led the count with 5,537 cases, making up about 60.9% of total filings. Chapter 13 filings followed at 3,441 cases (37.8%), indicating sustained attempts to restructure household debt. Chapter 11 filings totaled 116 cases, while Chapter 12, specific to family farmers and fishermen, recorded only 2 cases. These numbers demonstrate that Chapter 7 filings continue to dominate weekly activity, reflecting widespread financial distress among individuals.
2. An Interesting Fact About This Week's Filings:
   The Northern District of Illinois had the highest Chapter 7 filings this week, reporting 225 cases, reflecting 4.1% of national Chapter 7 filings. For Chapter 13, the Middle District of Tennessee was the clear leader, with 102 filings, maintaining its long-standing role as a restructuring hotspot. Interestingly, Chapter 11 filings were disproportionately high in the Southern District of New York, which contributed 14 cases (over 12% of national Chapter 11 filings). The two Chapter 12 filings occurred in the Eastern District of California, emphasizing its significance for agricultural bankruptcies. This district-based variation highlights unique economic pressures across regions.
3. Overview of District-Level Filings:
   This week, the Central District of California stood out with the largest combined Chapter 7 and Chapter 13 filings, totaling 428 cases. The Middle District of Alabama also showed a significant concentration of Chapter 13 filings, recording 89 cases, or about 2.6% of the national total. In contrast, districts like Vermont and Wyoming reported minimal activity, each with fewer than 10 filings across all chapters. The Northern District of Texas saw notable Chapter 11 activity, recording 12 filings, reinforcing its role in business insolvency cases. These district-level trends underline the disparities in bankruptcy filings across urban and rural areas.
4. Geographic (District) Disparities in Filings:
   The geographic distribution of filings remains highly uneven. Chapter 7 filings are concentrated in urbanized districts such as the Central District of California (328 cases) and the Eastern District of Michigan (152 cases). Meanwhile, sparsely populated districts like Alaska and Vermont reported fewer than 6 filings each. Chapter 13 filings were heavily localized in southern districts, such as Middle Alabama and Northern Georgia, which collectively contributed over 180 cases. These disparities suggest varying regional economic stresses, with urban districts experiencing more Chapter 7 filings and southern districts leading in Chapter 13.
5. Current Year Focus:
   Year-to-date totals for 2024 reveal significant growth in filings compared to 2023. Nationally, Chapter 7 filings average about 5,300 cases per week, reflecting an 11.8% increase over last year’s pace. Chapter 13 filings average 3,350 weekly cases, indicating slower but steady growth of 3.1% year-over-year. Chapter 11 filings remain relatively stable, averaging 115 cases per week, while Chapter 12 filings continue to contribute marginal totals of fewer than 3 cases per week. The persistence of Chapter 7 filings highlights the growing financial burden on households in 2024.
6. Comparative Analysis with Previous Years:
   Comparing week 50 of 2024 to the same period in 2023, Chapter 7 filings increased from 4,950 to 5,537 cases, marking a growth rate of 11.86%. Chapter 13 filings rose modestly from 3,338 to 3,441 cases (3.09% growth), indicating continued but slower restructuring efforts. Chapter 11 filings decreased year-over-year, falling from 127 to 116 cases, a drop of 8.66%. Chapter 12 filings remain flat, with 2 cases this week compared to 3 cases during the same week last year. These trends reflect rising household bankruptcies but declining business insolvency filings.
7. Analyzing Filings Per Capita:
   The Middle District of Tennessee reported the highest Chapter 13 filings per capita this week, with 1 filing per 13,000 residents. For Chapter 7, the Eastern District of Michigan leads per capita, with approximately 1 filing per 12,500 residents. Smaller districts, like Vermont and Wyoming, show significantly lower filings per capita, reflecting less economic pressure or smaller populations. The Central District of California, despite its high filing numbers, ranks lower in per capita filings due to its large population base. Filings per capita offer a clearer picture of the localized financial strain compared to raw filing numbers.
8. Analyzing the Changing Filings Per Capita:
   Over the last five years, per capita Chapter 7 filings have surged in districts like Eastern Michigan and Northern Illinois, increasing by 12.5% and 8.9%, respectively. Chapter 13 filings show steadiness in historically active regions, such as Middle Alabama, but have declined slightly in less active areas like Vermont. Chapter 11 filings per capita have decreased nationally, particularly in business-centric districts like the Southern District of Texas. Conversely, Chapter 12 filings remain highly stable, reflecting their niche role. This shift indicates that personal bankruptcies are increasing while business bankruptcies are tapering off.
9. Forecast for the Rest of the Year:
   If current trends persist, national Chapter 7 filings are projected to surpass 290,000 cases by the end of 2024, representing a 12% increase from 2023. Chapter 13 filings are forecast to reach 175,000 cases, showing moderate growth of 3.8%. Chapter 11 filings will likely close the year below 6,000 cases, continuing their decline. Chapter 12 filings are expected to remain marginal, totaling fewer than 120 cases for the year. Districts like the Central District of California and Middle Tennessee will continue to drive these trends.
10. Forecast Trends for Years After 2024:
    Looking ahead, Chapter 7 filings are expected to steadily increase, reaching 320,000 annual cases by 2026, driven by rising household debt and inflation. Chapter 13 filings will likely plateau around 180,000 cases as economic recovery stabilizes. Chapter 11 filings may stabilize near 6,000 annual cases, reflecting fewer large-scale business insolvencies. Chapter 12 filings will remain niche, influenced by agricultural market conditions, with annual totals hovering near 100 cases. These projections suggest that household bankruptcies will continue to dominate the bankruptcy landscape in the coming years.

Claude Analysis of this Week's Bankruptcy Statistics

1. The most recent week recorded 9,096 total bankruptcy filings across U.S. districts, with Chapter 7 liquidations leading at 5,537 cases (60.87%). Chapter 13 wage-earner reorganizations followed with 3,441 filings (37.83%), while Chapter 11 business reorganizations accounted for 116 cases (1.28%). Chapter 12 family farmer bankruptcies contributed just 2 cases (0.02%) to the weekly total. The data reveals a consistent pattern where Chapter 7 and 13 filings comprise over 98% of all bankruptcy activity.

2. The Central District of California maintained its position as the nation's busiest bankruptcy court with 400 total filings this week, yet surprisingly showed a 7.19% decrease from its previous week's 431 filings. The Middle District of Florida demonstrated remarkable volatility with 294 filings, representing a 21.99% surge from the previous week's 241 cases. Three districts - Vermont, Wyoming, and Guam - reported zero filings this week, marking only the second time in 2024 that three districts simultaneously recorded no activity. The Northern District of Illinois continued its strong showing with 211 filings, maintaining its position as the third most active district nationwide. The District of Delaware, despite its small size, processed 21 Chapter 11 filings this week, highlighting its continued significance in corporate bankruptcy proceedings.

3. District-level analysis reveals that the top five districts (Central California, Middle Florida, Northern Illinois, New Jersey, and Southern Texas) collectively handled 1,120 filings, representing 12.31% of national activity. The Southern District of New York, traditionally a major business bankruptcy venue, reported 92 total filings with a notably high proportion of Chapter 11 cases at 25 (27.17% of its filings). The Western District of Tennessee recorded an unusual spike of 120 filings, marking a 71.43% increase from its previous week. The District of Delaware's 21 Chapter 11 filings represented 18.10% of all national Chapter 11 activity this week. The Eastern District of Michigan showed the most significant week-over-week decline, dropping from 96 to 54 total filings.

4. Geographic analysis exposes substantial regional variations in bankruptcy activity, with coastal districts generally showing higher filing volumes than inland regions. The combined Texas districts (Northern, Southern, Eastern, and Western) totaled 337 filings, while California's four districts accumulated 629 cases, highlighting the impact of population density on filing patterns. Northeastern districts from Massachusetts to Virginia contributed 1,156 filings (12.71% of national totals), demonstrating the region's significant role in bankruptcy activity. The Southern districts, particularly Florida's three districts, showed strong activity with 537 combined filings. Mountain and Plains districts consistently reported lower filing numbers, with most recording fewer than 50 cases each.

5. Through week 50 of 2024, national bankruptcy filings have totaled 415,364 cases, averaging 8,307 filings per week. Chapter 7 cases lead with 252,647 filings (60.83%), followed by Chapter 13 with 156,039 filings (37.57%), Chapter 11 with 6,528 filings (1.57%), and Chapter 12 with 150 filings (0.04%). The weekly average has steadily increased from 7,623 in January to 8,256 in April, and currently stands at 8,307. Year-to-date statistics show the Central District of California maintaining its leadership position with 19,856 total filings. The national trend indicates growing financial stress across all regions, with 41 out of 94 districts showing double-digit percentage increases in weekly filing averages compared to the start of the year.

6. Comparing current statistics to 2023 reveals significant growth, with 2024's weekly average of 8,307 filings representing a 17.08% increase over 2023's average of 7,095 filings. Chapter 7 filings have shown the most dramatic year-over-year increase at 19.86%, while Chapter 13 filings grew by 14.92%. Chapter 11 filings have decreased by 8.66% compared to 2023, suggesting improved business conditions despite increased consumer bankruptcies. Chapter 12 family farmer bankruptcies have shown significant volatility with a 60% decrease from the previous year. The data indicates accelerating bankruptcy activity, with 2024's weekly averages consistently exceeding 2023 levels across most districts.

7. Per capita analysis reveals the Northern District of Alabama leading with approximately 5.2 filings per 100,000 residents this week, significantly above the national average of 2.7 filings per 100,000 residents. The Eastern District of Tennessee follows with 4.8 filings per 100,000 residents, while the Central District of California, despite its high absolute numbers, shows 2.1 filings per 100,000 residents. The District of Puerto Rico demonstrates elevated financial stress with 3.9 filings per 100,000 residents. Rural districts generally show lower per capita rates, with several reporting less than 1 filing per 100,000 residents.

8. The evolution of per capita filing rates reveals increasing financial pressure in several regions, with the Middle District of Florida showing a 0.8 point rise in weekly filings per 100,000 residents compared to 2023. The Northern District of Illinois has experienced a 0.6 point increase since January 2024, suggesting growing economic stress in the Chicago metropolitan area. The Eastern District of Michigan's 0.4 point decrease indicates some regional economic improvement. The Western District of Texas maintains stability at 2.3 filings per 100,000 residents despite significant population growth. The Southern District of New York shows increasing pressure with a 0.3 point rise in per capita filings since 2023.

9. Based on current trends, national bankruptcy filings are projected to reach approximately 431,964 cases by year-end 2024, representing a 17.08% increase over 2023. Chapter 7 filings are expected to reach 262,833 cases, while Chapter 13 filings should approach 162,073 cases. Weekly filing averages are anticipated to continue their upward trajectory, potentially reaching 8,750 filings per week by Q4 2024. Geographic disparities are expected to persist, with coastal and urban districts maintaining their dominant positions in total filing volumes. The ratio between Chapter 7 and Chapter 13 filings is projected to remain stable at approximately 1.6:1 through year-end.

10. Looking beyond 2024, bankruptcy filings are expected to maintain their upward momentum, potentially reaching 500,000 annual filings by 2025. Economic indicators, including elevated interest rates, persistent inflation, and rising consumer debt levels, suggest continued pressure on household finances through 2026. Chapter 7 filings are projected to grow at a faster rate than Chapter 13 filings, potentially reaching a 65:35 ratio by 2026. Geographic filing patterns are likely to evolve with population shifts, particularly showing increases in sunbelt districts experiencing rapid growth. The long-term trend suggests a potential return to historical bankruptcy filing levels of 1.2-1.5 filings per 1,000 residents by 2027, barring significant economic improvements or policy changes.

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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