Rise in bankruptcy filings ‘becoming a reality’
With at least one expert explaining expectations are “becoming a reality,” buy-here, pay-here dealerships and finance companies that still will book paper with consumers in an active bankruptcy are getting a deeper potential customer pool.
According to data provided by Epiq Bankruptcy, August marked 13 consecutive months that total, individual and commercial bankruptcy filings have registered monthly year-over-year increases.
Experts tabulated that total bankruptcy filings in August came in at 41,614, representing an 18% year-over-year. The August 2022 total was 35,409.
Epiq reported individual bankruptcy filings in August totaled 39,286, which also was an 18% increase year-over-year. The August 2022 individual filing total was 33,364.
Experts determined there were 22,887 individual Chapter 7 filings in August, a 21 percent jump versus the 18,851 filings in August 2022.
And there were 16,341 individual Chapter 13 filings in August, a 13 percent increase over the 14,457 filings the previous year.
“The continued year-over-year increases indicate the anticipated growth of bankruptcy filings is becoming a reality,” said Gregg Morin, vice president of business development and revenue at Epiq Bankruptcy.
“This emphasizes the critical role bankruptcy analytics plays in creating effective strategies and informed decisions when navigating an evolving market,” Morin continued in a news release.
There were 634 commercial Chapter 11 filings registered in August, an increase of 54% from the 411 filings registered in August of last year, according to Epiq.
Experts added overall commercial filings in August increased 14% to 2,328, up from the 2,045 commercial filings registered last August.
Epiq pointed out that small business filings, captured as Subchapter V elections within Chapter 11, increased 43% to 194 in August.
And looking at the data on sequential comparison, Epiq reported the August total bankruptcy figure marked a 17% jump from the 35,718 total filings recorded in July.
“Elevated interest rates, rising prices due to inflation and resumption of student loan payments are just a few examples of the economic headwinds facing businesses and individuals,” said American Bankruptcy Institute executive director Amy Quackenboss said in the news release.
“Struggling families and companies looking to find their financial footing are increasingly turning to the established path of bankruptcy,” Quackenboss added.
ABI has partnered with Epiq Bankruptcy to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.