The second half of the year started with an upturn in bankruptcy filings, and an industry leader discussed a possible reason for the movement.
According to data provided by Epiq Systems, the American Bankruptcy Institute reported total U.S. filings increased 1 percent year-over-year in July. Officials tallied up total filings at 62,196 in July 2018, up from 61,433 registered a year earlier.
ABI also pointed out the 59,128 consumer filings in July represented a 1-percent rise from the previous year’s consumer total of 58,511.
The organization noted that July business filings climbed 5 percent to 3,068 from last July’s business total of 2,922. The 411 commercial Chapter 11 filings in July marked a 23-percent increase over the 333 commercial Chapter 11 filings registered last July.
ABI executive director Samuel Gerdano looked to explain why bankruptcy filings started to climb as the third quarter began.
“Distressed consumers and businesses struggling under increasing interest rates and global challenges are provided with financial shelter in bankruptcy,” Gerdano said.
“The recommendations of ABI’s Chapter 11 Commission along with the ongoing efforts of the Commission on Consumer Bankruptcy are aiming to make bankruptcy more accessible for struggling businesses and families,” he added.
July’s commercial Chapter 11 filings represented a 33 percent increase over the previous month’s total of 308. Total commercial filings were also up 1 percent over the June total of 3,051.
However, officials mentioned that total bankruptcy filings decreased 2 percent in July compared to the month’s total of 63,728. Consumer filings also dropped 3 percent in July from the 60,677 filings in June.
ABI calculated the average nationwide per capita bankruptcy-filing rate in July was 2.49 (total filings per 1,000 per population), a slight decrease from the filing rate of 2.50 during the first six months of the year.
Average total filings per day in July came in at 2,962, a 4 percent decrease from the 3,072 total daily filings in July of last year.
States with the highest per capita filing rates (total filings per 1,000 population) in July included:
1. Alabama (5.66)
2. Tennessee (5.48)
3. Georgia (4.52)
4. Mississippi (4.27)
5. Illinois (3.77)
ABI has partnered with Epiq Systems, 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.