New bankruptcy filings in February registered double-digit year-over-year increases across all major U.S. filing categories, according to data provided by Epiq Bankruptcy.
The 31,889 total new bankruptcy filings in February were up 18% from the 27,006 filings registered in February 2022. Total commercial filings also increased 18% to 1,696 compared with 1,442 in February 2022. Commercial Chapter 11 filings increased 83% to 373 filings, up from 204, and Subchapter V small business elections increased 45% to 120 versus the 83 filings registered last February.
Continuing year-over-year comparisons, total individual filings increased 18% to 30,193 versus 25,564 in February 2022. While still below pre-pandemic levels, individual Chapter 7 filings increased 12% to 16,991 versus 15,190 in February 2022, and individual Chapter 13 filings increased 28% to 13,149 versus 10,311 last February.
On a month-over-month basis, even though there are three fewer days in February than January, the 31,889 total filings registered last month were still 2% higher than the 31,161 total filings in January. Conversely, total commercial filings decreased 1% to 1,696 from 1,713 the month prior. Total Chapter 11 filings remained flat — 373 versus 376 — and Subchapter V elections increased 5% to 120 from 114. Total individual filings increased 3% to 30,193 from 29,448, and individual Chapter 7 filings increased 8% to 16,991 from 15,717, while individual Chapter 13 filings decreased 4% to 13,149 from the 13,678 filed in January.
“The growing number of households and businesses filing for bankruptcy reflects the mounting economic challenges they now face,” Amy Quackenboss, executive director of the American Bankruptcy Institute, said. “Debt loads are expanding as the prices of goods and services have gone up with inflation and the cost of borrowing continues to rise. While pandemic relief efforts have largely expired, the safe haven of bankruptcy is continually available for financially distressed businesses and consumers.”
Comparing open to closed cases, while new filings are on the rise, the current 662,204 total open cases in February represented another month-over-month decline. There are 36% fewer open cases than May 2019, when there were more than 1 million. Looking back one year, there are 52,662 fewer open cases than the 714,866 cases open in February 2022, marking a 7% decline.
“Overall, the stimuluses have had a positive effect for individuals and companies, as 10,843 more cases have closed than opened in 2023,” Gregg Morin, vice president of business development and revenue for Epiq Bankruptcy. said. “However, as new monthly filings rise, this trend is likely to end.”