Commercial chapter 11 filings increased 50% in November 2018 over November of last year, according to data provided by Epiq Systems. The 653 commercial Chapter 11 filings registered in November 2018 jumped from November 2017’s commercial Chapter 11 filing total of 435.
Commercial bankruptcy filings totaled 3,185 in November 2018, a 5% increase from the 3,039 commercial filings in November 2017. Conversely, the 58,887 total U.S. bankruptcy filings in November 2018 registered a 2% decrease over the November 2017 total of 60,327. Consumer bankruptcies also decreased in November 2018, as the 55,702 filings were 3% less than the 57,288 consumer filings registered in November 2017.
“Filing costs may divert distressed consumers and businesses from the financial relief of bankruptcy,” said American Bankruptcy Institute Executive Director Samuel J. Gerdano. “The recent introduction of the ‘Small Business Reorganization Act of 2018’ is a positive step toward reducing the costs and burdens on struggling small and medium businesses. Ongoing efforts of the Commission on Consumer Bankruptcy are also aiming to improve access for struggling families seeking a fresh start through bankruptcy.”
The “Small Business Reorganization Act of 2018” is based on some of the recommendations of ABI’s Commission to Study the Reform of Chapter 11 to reinstate reorganization under the Bankruptcy Code as a viable option for small and medium enterprises. Both S. 3689, sponsored by Senate Judiciary Chairman Charles Grassley (R-Iowa) and co-sponsored by Sen. Sheldon Whitehouse (D-R.I.), and H.R. 7190, sponsored by Rep. Doug Collins (R-Ga.) and co-sponsored by Reps. David Cicilline (D-R.I.) and Tom Marino (R-Pa.), were introduced on Nov. 29.
ABI’s Commission on Consumer Bankruptcy will be releasing its final report of recommendations for improving the consumer bankruptcy system at ABI’s Annual Spring Meeting in April 2019.
Commercial chapter 11 filings in November 2018 represented a 17% increase over the 557 filings recorded in October 2018, although November’s commercial filing total represented a 6% decrease from the October 2018 commercial filing total of 3,398. Total filings for November decreased 13% compared to the 67,570 total filings in October 2018. Total noncommercial filings for November also represented a 13% decrease from the October2018 noncommercial filing total of 64,172.
The average nationwide per capita bankruptcy filing rate was 2.47 per 1,000 for the first 11 calendar months of 2018, a slight decrease over the 2.49 rate registered during the first 10 months of the year. The average daily filing total in November 2018 was 2,944, a slight decrease from the 3,016 total daily filings registered in November 2017. States with the highest per capita filing rates through the first 11 months of 2018 were:
- Alabama (5.72)
- Tennessee (5.48)
- Georgia (4.60)
- Mississippi (4.31)
- Illinois (3.73)