The bankruptcy filing by WeWork in November propelled November commercial Chapter 11 filings to 842, an increase of 141% compared with the 349 filings registered in November 2022, according to data provided by Epiq Bankruptcy.
The case filed by WeWork on Nov. 6 included 517 related filings, according to analysis from the American Bankruptcy Institute, representing the third-most related filings in a case since the U.S. Bankruptcy Code became effective in 1979.
Overall commercial filings increased 21% to 2,252 in November, up from the 1,864 commercial filings registered in November 2022. Small business filings, captured as Subchapter V elections within Chapter 11, increased 79% to 181 in November, up from 101 in November 2022.
There were 37,860 total bankruptcy filings in November, a 21% increase from the November 2022 total of 31,187. Individual bankruptcy filings also registered a 21% year-over-year increase, as the 35,608 in November represented an increase over the 29,323 filings in November 2022. There were 20,250 individual Chapter 7 filings in November, a 23% increase compared with the 16,421 filings recorded in November 2022, and there were 15,280 individual Chapter 13 filings in November, a 19% increase compared with the 12,862 filings last November.
“Individual bankruptcy filings continue to rise as support from government stimulus and lender forbearance programs recedes and ongoing price inflation and higher lending rates put pressure on household balance sheets,” Todd Madsen, vice president at AACER, said. “Commercial filings also continue to rise as businesses struggle to refinance debt in today’s higher rate environment.”
“The rebound in filings seen this year is a reflection of the challenging economic environment resulting from the evaporation of pandemic responses, including government stimulus, low interest rates and looser lending terms,” Amy Quackenboss, executive director of the ABI, said. “Bankruptcy provides a reliable beacon to consumers and businesses struggling to navigate the financial terrain of higher interest rates, tighter lending terms and elevated pricing.”
Most categories of bankruptcy filings decreased slightly in November compared with October. Only commercial Chapter 11 filings registered an increase, bolstered by the WeWork filings. Commercial Chapter 11 filings increased 31% from October’s 645 filings. Total and consumer bankruptcies both decreased 7% when compared to their respective October filing totals of 40,663 for total filings and 38,287 for consumer filings. Individual Chapter 7 filings decreased 9% and Chapter 13 filings decreased 4% from October’s filings. Overall commercial filings decreased 5% from the 2,376 filings registered in October. Subchapter V elections within Chapter 11 decreased 2% from the 185 filed in October 2023.
