Commercial Chapter 11 filings increased 25% in October 2019 over the previous month, according to data provided to the American Bankruptcy Institute by Epiq Systems.
The 520 commercial Chapter 11 filings in October 2019 were up over the 417 filings registered in September. Overall commercial filings also increased in October 2019 as the 3,527 filings were 12% more than the 3,164 filings last month. The 67,806 total U.S. bankruptcy filings for October 2019 represented an 11% increase from the September total of 61,132 filings. The 64,279 consumer filings in October 2019 also represented an 11% increase from last month’s consumer total of 57,968.
“Bankruptcy provides an effective shield for financially distressed families, farmers and businesses faced with increasing debt burdens and trade costs,” said ABI Executive Director Samuel J. Gerdano. “New bankruptcy laws are providing better access to the financial fresh start needed by struggling small businesses, veterans and family farmers.”
President Donald J. Trump signed three key pieces of bankruptcy legislation into law on Aug. 23. The “Small Business Reorganization Act of 2019” (P.L. 116-54; effective February 2020) adds a new subChapter V to Chapter 11 providing a better path for small businesses to successfully restructure, reduce liquidations, save jobs and increase recoveries to creditors. The “HAVEN Act” (P.L. 116-52) revises consumer filing requirements to exclude VA and DoD disability payments from the monthly income calculation used for bankruptcy means testing. The “Family Farmer Relief Act of 2019” ((P.L. 116-51) raised the debt limit for Chapter 12 filings for struggling family farmers or fishermen from $4.3 million to $10 million. To view a webinar of experts discussing the new laws, please click here.
Total bankruptcy filings in October 2019 increased slightly from the October 2018 filing total of 67,593. The 64,279 consumer filings in October also represented a slight increase from last year’s October consumer total of 64,179. October 2019 business filings increased 3% to 3,527 from last year’s business total of 3,414. Conversely, the 520 commercial Chapter 11 filings recorded in October 2019 represented a 7 % decrease from the 557 commercial Chapter 11 filings in October 2018.
The average nationwide per capita bankruptcy filing rate in October was 2.51 (total filings per 1,000 per population), a slight increase from the filing rate of 2.50 during the first nine months of 2019. Average total filings per day in October 2019 were 3,082, a slight increase from the 3,077 total daily filings in October 2018. States with the highest per capita filing rates (total filings per 1,000 population) in October 2019 were:
1. Alabama (5.75)
2. Tennessee (5.47)
3. Georgia (4.43)
4. Mississippi (4.28)
5. Nevada (3.82)
