US bankruptcy filings fall 24% in 2021

Total US bankruptcy filings during calendar year 2021 decreased 24% from 2020 amid stabilization measures and lender forbearance in response to the economic challenges resulting from the COVID-19 pandemic.

According to data provided by Epiq, total filings fell from 529,106 in 2020 to 401,291 filings during calendar year 2021. Annual bankruptcy filings last registered a similar total in 1984, with 348,521 total filings. Total consumer filings were 378,952 nationwide for calendar year 2021, 24% fewer than the 496,589 total filings during 2020. The 2021 consumer filing total is the lowest since the 341,233 filings registered in 1985. Commercial filings also declined, as the 22,339 business filings in calendar year 2021 represented a 31% drop from the 32,517 recorded in calendar year 2020. Commercial chapter 11 filings registered the largest percentage decrease during calendar year 2021, as the total of 3,724 was 48% less than the 7,129 chapter 11 filings recorded during calendar year 2020.

“The decrease in US Bankruptcy filings in 2021 is a reflection of the government relief programs, moratoriums, lender deferments and low interest rates intended to help families and businesses weather the economic challenges resulting from the COVID-19 pandemic,” said ABI Executive Director Amy Quackenboss.

“Consumers and businesses are now facing the new year with less government relief, fewer lender deferments, rising inflation, worker shortages and supply chain challenges as the pandemic continues. Bankruptcy helps struggling families and companies by providing a proven path through financially difficult times.”

Total US bankruptcy filings in December decreased 19% to 27,978 in 2021 from the 34,342 filings in December 2020. Similarly, the 26,317 total noncommercial filings for December represented an 18% decrease from the December 2020 noncommercial filing total of 32,145. The 1,661 total commercial filings in December 2021 represented a 24% decrease from the 2,197 total commercial filings during the same period in 2020. The 309 commercial chapter 11 filings in December 2021 were down 22% from the 394 recorded in December 2020.

Chapter 7 individual bankruptcies had 16,214 new filings in December, down 6.8% over November 2021, which had 17,395 new filings. For the full year, new Chapter 7 individual bankruptcy filings were 265,948, down 24.7% over the full year 2020, which had 352,978 new filings. In 2021, the top five states with new Chapter 7 filings were California (30,917), Florida (21,329), Ohio (15,956), Illinois (13,868), and Michigan (12,337).

Chapter 13 individual bankruptcies had 10,024 new filings, down 2.7% over November 2021, which had 10,306. This is the second month where new Chapter 13 filings declined after the prior 6 months of incremental increases month-over-month. For the full year, Chapter 13 filings were 112,197, down 21.4% over 2020 which had a total of 142,659 new filings. In 2021, the U.S. Southeast region continued to lead new Chapter 13 filings with Georgia (10,556), Alabama (8,725), Florida (7,948), and Tennessee (7,372) leading the way as the states with the largest filing activity.

“December individual US bankruptcy filing activity continued to trend down as has been the pattern since the COVID-19 global pandemic manifested in the U.S. in March 2020. Commercial filings spiked up sharply month-over-month, but levels continue to be way off pre-COVID-19 levels,” said Chris Kruse, senior vice president of Epiq Bankruptcy Technology.

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