16
BANKRUPTCY
FILINGS AT
LOWEST LEVEL
SINCE 1986
It has not been since 1986 that so few
Americans have filed for bankruptcy.
Legal services firm Epiq recently
released both its December 2020 and
annual bankruptcy filing statistics from its
bankruptcy information services business,
AACER—it showed 2020 had the lowest
number of bankruptcy filings since 1986 with
a total of 529,068 filings across all chapters.
For December, the total new U.S.
bankruptcy filings across all chapters totaled
34,304 for the month, the lowest monthly
total since January 2006. e category
that continues to grow year over year is
commercial Chapter 11 filings, which were up
29% with 7,128 new filings in 2020 compared
to 5,518 in 2019.
"e peak in Chapter 11 filings for
Q2 and Q3 is due to preexisting distressed
companies coupled with the onset of a zero-
revenue environment. e federal backstop
proved a vital lifeline for the stabilization of
corporations to protect the U.S. economy,"
said Deirdre O'Connor, Managing Director
of Corporate Restructuring at Epiq. "is
federal intervention created record-breaking
capital deployment fueled by investors chasing
yield as companies attempt to ride out this
storm."
"New bankruptcy filings continue to slide
into record territory as the global pandemic
spurs regulatory intervention to keep U.S.
consumers and businesses afloat," said Chris
Kruse, SVP of Epiq AACER. "e second
stimulus package totaling over $900 billion is
getting capital into the market and delaying
bankruptcy filings across the country."
Noncommercial chapter 13 filings in
December decreased 46% in 2020, at 147,144
filings, down from 272,420 filings for all of
2019.
Chapter 7 noncommercial filings were
down 22% in 2020 with 348,428 new filings,
down from 444,931 for the entire 2019.
"ese two categories are a bellwether
for the U.S. consumer market as they are a
trailing economic indicator of the overall
strength of a market where unemployment
continues to ravage the country. We expect
this category to grow substantially in the
second half of 2021," Kruse said.
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