US bankruptcies see sharp decline in Nov; both commercial, consumer filings drop 39%
On the back of government relief programmes and moratoriums, the US commercial and consumer bankruptcy filings have seen sharp year-on-year decline in November 2020. The total US bankruptcies in November 2020 at 34,478 were down 39% from the 56,085 filings in November 2019. Consumer bankruptcies also decreased 39% in November 2020, as filings dropped from the 53,063 last year to 32,143 in the current financial year, according to data provided by Epiq, a leading provider of managed technology for the global legal profession.
Commercial bankruptcy filings totaled 2,335 in November 2020, showing a decline of 23% from the 3,022 in November 2019.
However, commercial chapter 11 bankruptcy filings in the US increased 46% in November 2020 over November of last year. There were 654 Commercial chapter 11 filings in November 2020 compared to 449 in the same month last year.
Total bankruptcies (494,756) filed through the first 11 months of 2020 is also the lowest annual filing total since the 617,660 filings recorded in calendar year 2006, the year after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 went into effect and placed new requirements on filers.
“Government relief programs, moratoriums and lender deferments have helped families and businesses weather surging COVID-19 cases, elevated unemployment rates and growing debt loads to this point of the pandemic,” said ABI Executive Director Amy Quackenboss. “Unless renewed by Congress, the expiration of the stabilization programs will leave struggling consumers and businesses in a challenging and uncertain position. Bankruptcy provides a proven shield to companies and consumers facing mounting financial distress.”
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency
Commercial chapter 11 filings in November 2020 represented a 19% increase from the 550 filings recorded in October 2020. Total filings for November decreased 14% compared to the 40,218 total filings in October 2020. Total noncommercial filings for November decreased 15 percent from the October 2020 noncommercial filing total of 37,679. November’s commercial filing total represented an 8 percent decrease from the October 2020 commercial filing total of 2,539.
The average nationwide per capita bankruptcy filing rate (total filings per 1,000 population) was 1.74 for the first 11 calendar months of 2020, a slight decrease from the 1.78 rate registered during the first 10 months of the year. The average daily filing total in November 2020 was 1,815, a 39 percent decrease from the 2,952 total daily filings registered in November 2019.
