US bankruptcy filings in January drops to a 15-yr low
US bankruptcy filings in January experienced the lowest monthly number of across all chapters since February 2006 (26,617 filings) with only 32,298 new filings, according to data released by Epiq, a global technology-enabled services leader to the legal services industry and corporations.
In a press release issued on 4 February 2021, Epiq said that the continued slide represents a decrease of 6% over December 2020 filings, and a 44% decrease over January 2020 filings where there were 58,161 new cases. Commercial filings across all chapters fell to 2,124 new cases, a 7% drop over December 2020 and a 42% drop over January 2020, which had a total of 3,560 new cases.
“Out of court solutions, available liquidity, and general uncertainty has caused a significant pause in Chapter 11 filings this past month,” said Deirdre O’Connor, senior managing director of corporate restructuring at Epiq. “We appear to be suspended in an air bubble at the moment.”
“The new year data continues to show extreme softness in new U.S. bankruptcy filings” said Chris Kruse, senior vice president of Epiq AACER. “The optimism around a new political administration and potential new government relief for consumers has kept new filings historically low.”
Chapter 13 non-commercial filings are down 4% over last month with only 8,972 new cases. Chapter 7 non-commercial filings are also down 6.5% in January 2021 with only 21,225 new cases. With unemployment rates in December holding steady at 6.7%, pressure on consumers has stabilized and renewed confidence on stimulus aid is rising.
Also read: US Bankruptcy filings drop 30% in 2020 as govt stimulus supports distressed business, individuals
“We continue to expect new filings will grow substantially in the second-half of 2021, notwithstanding any likely short-term stimulus,” said Kruse.
