Epiq recent January 2021 bankruptcy filing statistics report from its AACER bankruptcy information services business revealed that January experienced the lowest monthly number of new bankruptcy filings (32,298) across all chapters since February 2006 (26,617 filings). The continued slide represents a decrease of 6% vs. December 2020 filings, and a 44% decrease vs. January 2020 filings (58,161 new cases). Commercial filings across all chapters fell to 2,124 new cases, a 7% drop vs. December 2020 and a 42% drop vs. January 2020, which had a total of 3,560 new cases.
“Out of court solutions, available liquidity and general uncertainty has caused a significant pause in Chapter 11 filings this past month,” Deirdre O’Connor, senior managing director of corporate restructuring at Epiq, said. “We appear to be suspended in an air bubble at the moment.”
“The new year data continues to show extreme softness in new U.S. bankruptcy filings,” Chris Kruse, senior vice president of Epiq AACER, said. “The optimism around a new political administration and potential new government relief for consumers has kept new filings historically low.”
Chapter 13 non-commercial filings were down 4% vs. December, with only 8,972 new cases. Chapter 7 non-commercial filings wre also down 6.5% in January 2021, with only 21,225 new cases. With unemployment rates in December holding steady at 6.7%, pressure on consumers has stabilized and renewed confidence on stimulus aid is rising.
“We continue to expect new filings will grow substantially in the second half of 2021, notwithstanding any likely short-term stimulus,” Kruse said.
