Experts put 18% annual rise in bankruptcies into context
Total 2023 bankruptcy filings increased 18% year-over-year, but Epiq AACER put that notable rise in context.
According to data provided by Epiq AACER on Wednesday, total bankruptcy filings in 2023 came in at 445,186, which was up from the 2022 total of 378,390.
While representing a substantial year-over-year increase, Epiq AACER pointed out total bankruptcy filings remain lower than the pre-pandemic total of 757,816 recorded in 2019.
“As anticipated, we saw new filings in 2023 increase momentum over 2022 with a significant number of commercial filers leading the expected increase and normalization back to pre-pandemic bankruptcy volumes,” Epiq AACER vice president Michael Hunter said in a news release.
“We expect the increase in number of consumer and commercial filers seeking bankruptcy protection to continue in 2024 given the runoff of pandemic stimulus, increased cost of funds, higher interest rates, rising delinquency rates, and near historic levels of household debt,” Hunter continued.
Epiq AACER reported overall consumer filing totals for 2023 came in at 419,559, representing an 18% increase from the 356,911 consumer filings the previous year.
The 175,964 consumer Chapter 13 bankruptcy filings in 2023 also marked an 18% jump above 2022’s total of 149,069.
Analysts added consumer Chapter 7 filings increased 17% in 2023 to 242,936 from 207,188 filings in the previous year.
“Though still below pre-pandemic figures, bankruptcies in all filing categories climbed last year amid the evaporation of pandemic emergency responses, increased interest rates and tougher lending standards,” American Bankruptcy Institute executive director Amy Quackenboss said in the news release.
“As interest rates remain elevated, increasing geopolitical tensions weigh on global supply chains and debt loads continue to grow, struggling businesses and families can turn to the proven process of bankruptcy for a financial fresh start,” Quackenboss went on to say.
Looking at just December data, Epiq AACER indicated total bankruptcy filings came in at 34,447, representing a 16% increase from the December 2022 total of 29,654.
Analysts said the consumer bankruptcy filing total of 32,390 also marked a 16% increase from the 27,917 consumer filings in December 2022.
ABI has partnered with Epiq AACER to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.