In the calendar year 2023, commercial Chapter 11 filings saw a significant surge, increasing by 72 percent to reach 6,569, compared to the previous year’s total of 3,819. This data is sourced from Epiq AACER, a provider of U.S. bankruptcy filing information.
Overall commercial filings, inclusive of various chapters, experienced a 19 percent rise, reaching 25,627 from the previous year’s 21,479. Notably, Subchapter V elections within Chapter 11 demonstrated substantial growth in calendar year 2023, with 1,939 filings, representing a 45 percent increase from the 1,334 recorded in 2022.
The broader context of total bankruptcy filings in calendar year 2023 reveals a noteworthy 18 percent increase, totaling 445,186, compared to the 378,390 registered in calendar year 2022. Despite this significant year-over-year rise, the total remains below the pre-pandemic figure of 757,816 recorded in CY2019.
Consumer filing figures for calendar year 2023 show a parallel increase, with a total of 419,559, marking an 18 percent rise from the 356,911 filings in the previous year. Within this category, consumer Chapter 13 bankruptcy filings reached 175,964, reflecting an 18 percent increase over 2022’s total of 149,069. Consumer Chapter 7 filings also rose by 17 percent in CY2023 to 242,936 from 207,188 in the previous year.
While still below pre-pandemic levels, overall bankruptcy filings across categories increased in the face of diminishing pandemic emergency responses, escalating interest rates, and stricter lending standards. As interest rates remain elevated and global tensions impact supply chains, both businesses and families are turning to bankruptcy as a proven process for a financial fresh start.
In December 2023 alone, total bankruptcy filings reached 34,447, marking a 16 percent increase from the December 2022 total of 29,654. The consumer bankruptcy filing total of 32,390 represented a 16 percent
I anticipate the trend to persist into 2024 due to factors such as the conclusion of pandemic stimulus, rising fund costs, increased interest rates, growing delinquency rates, and historically high levels of household debt.