US bankruptcy commercial filings decline 45% in Feb; Chapter 11 filings drop 23%
Total US bankruptcy commercial filings in February 2021 decreased 45% over the same period last year, according to data provided by Epiq. This year February saw a total of 31,213 filings, down from 56,209 filings in February 2020.
Total consumer filings were 29,261 this year showing a 45% decrease from the 53,097 filings in February 2020. Total commercial bankruptcy filings decreased 37% to 1,952 this year in February against 3,112 filed in February 2020.
Commercial chapter 11 filings decreased 23% in February 2021 to 420 from 548 in February 2020.
“While the COVID-19 pandemic continues to have a serious financial impact across the globe, the economic stabilization measures put in place by the government have enabled many distressed families and businesses to delay filing for bankruptcy,” said ABI Executive Director Amy Quackenboss. “Bankruptcy remains a proven shield for families and companies seeking protection from the lingering financial distress and economic uncertainty caused by the pandemic.”
Senate Judiciary Committee Chair Richard Durbin (D-Ill.) and Ranking Member Charles Grassley (R-Iowa) on February 25 introduced the COVID-19 Bankruptcy Relief Extension Act to temporarily extend the COVID-19 bankruptcy-relief provisions for consumers and small businesses enacted as part of the March 2020 CARES Act and December 2020 omnibus appropriations bill. As the provisions are set to sunset on 27 March 2021, Durbin and Grassley’s legislation would push the sunset dates for these provisions to March 2022.
Among the provisions of the legislation is keeping the eligibility limit for small businesses electing to file for subchapter V under chapter 11 at $7,500,000 to provide more vulnerable businesses with a streamlined path for restructuring their debts. This eligibility limit for small businesses was increased from $2,725,625 of debt to $7,500,000 by the CARES Act.
“As further stabilization efforts are considered by Congress, this important legislation will allow more time for families and small businesses to utilize the important bankruptcy provisions of the CARES Act and December’s omnibus appropriations bill,” Quackenboss said.
Month-on-month, the total filings of 31,213 in February 2021 was 3% lower than the previous month’s 32,312. Consumer filings also dropped 3% to 29,261 in February from the 30,263 filings recorded in January 2021. Commercial filings fell 5% in February from January 2021’s total of 2,049 commercial filings. Total commercial chapter 11 filings decreased 12% from the 479 commercial chapter 11s recorded the previous month.
The average nationwide per capita bankruptcy filing rate in February 2021 was 1.23 (total filings per 1,000 per population), a slight decrease from January 2021’s rate of 1.25. Average total filings per day in February 2021 were 1,643, a 44 decrease from the 2,958 total daily filings recorded in February 2020.
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