Just like fuel prices and the costs of many other goods and services, the volume of bankruptcy filings jumped significantly to finish the first quarter.

According to data provided by Epiq Bankruptcy, filings in March increased 33.5% month-over-month, as filings rose from 26,993 to 36,049.

Similarly, Epiq reported the 34,244 total noncommercial filings for March represented a 34% increase from the February noncommercial filing total of 25,565.

Experts noted the 1,805 total commercial filings in March marked a 26.4% rise from the 1,428 total commercial filings during the previous month.

Epiq went on to mention commercial Chapter 11 filings increased 38% in March to 292 from the 203 commercial Chapter 11 filings in February. Small business filings, captured as subchapter V elections within Chapter 11, increased 51% to 178 in March from 118 in February.

“March is typically the month with the largest number of new bankruptcy filings on an annual basis,” Epiq senior vice president Chris Kruse said in a news release. “We continue to watch closely the bankruptcy activity as we emerge from the global pandemic and expect a return to a more active market in the months to come.”

Epiq pointed out that the 81 subchapter V elections filed during the week of March 21 represented the highest weekly total ever, eclipsing the previous record of 71 filed during the same week last year.

Experts explained the spike was in advance of the debt-eligibility limit returning from the expanded amount of $7.5 million first established under the CARES Act of 2020 to the original $2,725,625 threshold on March 28 established under the Small Business Reorganization Act of 2019.

Due to priorities and procedural issues, the American Bankruptcy Institute (ABI) noted in the same release that the Senate was not able to address legislation prior to the March 27 sunset to permanently set the subchapter V eligibility limit at $7.5 million. ABI said work on a substitute bill is underway on Capitol Hill to permanently restore the eligibility limit back to $7.5 million and cover any subchapter V cases that were pending at the time of the March 27 sunset.

Consistent with the recommendations of ABI’s Commission on Consumer Bankruptcy, the substitute also continues to push for the debt limit for individual chapter 13 filings to be increased to $2.75 million and remove the distinction between secured and unsecured debt for that calculation.

“Amid rising interest rates, growing inflation concerns, worker shortages and supply chain challenges, access to bankruptcy is imperative for struggling consumers and businesses,” ABI Executive Director Amy Quackenboss said.

“Congressional consideration of legislation permanently making both the expanded eligibility limits for small businesses electing to file for subchapter V under Chapter 11, and consumers looking to access Chapter 13, would give more families and small businesses the chance at a financial fresh start,” Quackenboss continued.

While filings surged in March, the first quarter total wasn’t quite as large as what Epiq tallied for the opening quarter of 2021.

Epiq indicated the 89,252 total bankruptcy filings in Q1 represented a 17% decrease from the 107,043 total filings during the same period last year in the midst of the pandemic. Experts said noncommercial filings also decreased 16% to 84,510 filings in the first quarter from 100,682 noncommercial filings during the same period in 2021.

Total overall commercial bankruptcies decreased 25% in the first quarter, as the 4,742 filings were down from the 6,361 commercial filings during the first quarter of 2021.

ABI has partnered with Epiq Bankruptcy to provide the most current bankruptcy filing data for analysts, researchers and members of the news media. Epiq Bankruptcy is a provider of data, technology, and services for companies operating in the business of bankruptcy. Its new Bankruptcy Analytics subscription service provides on-demand access to bankruptcy data that’s updated daily.

Learn more at https://bankruptcy.epiqglobal.com/analytics.