Bankruptcy filings steady in February with future increases expected
On Monday, the American Bankruptcy Institute (ABI) reported nearly steady movements in total and consumer filings for February, but experts fully anticipate significant changes coming as a result of the COVID-19 pandemic impact on the economy.
According to data provided by Epiq Systems, total bankruptcy filings ticked up 0.1% to 56,182 in February from the 56,144 cases filed in February of last year. Consumer filings edged 0.3% higher in February to 53,098 from last February’s consumer filing total of 52,941.
ABI also reported total commercial Chapter 11 filings in February 2020 decreased 20% the same period last year, Inc. The 547 commercial Chapter 11 filings in February were down from the 685 commercial Chapter 11 filings in February of last year.
Officials determined total commercial filings came in at 3,084 in February, representing a 4% decrease from the 3,203 business filings recorded in February of last year.
“As businesses close and the supply chain endures disruptions due to the COVID-19 coronavirus, bankruptcy provides distressed businesses and consumers the financial shelter they need in these challenging times,” ABI executive director Amy Quackenboss said in a news release.
“While the statistics might not show the immediate effects, we expect filings to increase as a result of the financial impact of the COVID-19 pandemic,” Quackenboss added.
ABI hosted a webinar last week featuring a panel of experts that shed light on the impact, and likely reaction, from various sectors of the economy, as well as suggestions on what may be around the corner in the world economy. Go to this website to watch a replay of the webinar.
Looking at the data based on a sequential comparison, officials indicated total bankruptcy filings fell 3% in February from January’s total of 58,150 filings. They said total noncommercial filings also declined 3% from the previous month, from 54,615 filings in January to 53,098 filings in February.
ABI pointed out the February commercial Chapter 11 filing total of 547 represented a 13% decrease compared to the previous month’s commercial filing total of 630. February’s 3,084 commercial filings also dropped 13 percent versus the 3,535 filings recorded in January.
Officials went on to mention the average nationwide per capita bankruptcy filing rate in February was 2.21 (total filings per 1,000 per population), a slight decrease from January’s rate of 2.25. Average total filings per day in February were 2,957, a slight increase from the 2,955 total daily filings recorded in February of last year.
States with the highest per capita filing rates (total filings per 1,000 population) in February included:
1. Alabama (5.33)
2. Tennessee (5.00)
3. Georgia (4.49)
4. Mississippi (4.16)
5. Arkansas (3.50)
ABI has partnered with Epiq Systems, a leading provider of managed technology for the global legal profession in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.