*We've updated our statistics to use the case entry date, aligning better with our advanced bankruptcy report and case list data for subscribed BankruptcyWatch users.

Our Analysis of the Bankruptcy Statistics (Updated April 22nd 2024)

Bankruptcy filings continue on an upward trajectory. Chapter 7 filings—a lifeline for many struggling households—increased by 18.24% year-over-year (5,191 in 2023 to 6,138 in 2024). Chapter 13 filings, allowing individuals to restructure their debt, increased by 10.47% year-over-year (3,353 in 2023 to 3,704 in 2024). Chapter 11 filings, often used by businesses dealing with insolvency, decreased by 37.8% year-over-year (164 in 2023 to 102 in 2024). The general increase in Chapter 7 and Chapter 13 filings continues to drive the bulk of the year-over-year growth.

Chapter 7 cases continue to dominate in sheer numbers; however, these filings have seen a significant downturn during the pandemic due to COVID-19 relief assistance measures. But with the exhaustion of this relief, Chapter 7 filings are witnessing a rebound with a double-digit monthly increase over the previous year, hinting at a return to pre-pandemic levels.

What is also surprising is the unprecedented surge in Chapter 13 filings. Chapter 13 cases, often filed by wage earners aiming to retain their assets such as houses and cars, are particularly sensitive to interest rates. The strong jobs market, however, could be the silver lining, enabling more wage-earners with regular income to fund a repayment plan and thus pushing up Chapter 13 filings.

Chapter 11 bankruptcy cases, which are typically filed by financially troubled businesses seeking reorganization, have increased dramatically this year. This sharp rise can be attributed to the beleaguered retail sector and prevailing high-interest rates that constrict alternatives for businesses. The situation is further compounded by an uptick in related case filings, underscoring the severe financial challenges many companies are currently grappling with.

Looking ahead, the U.S. Department of Justice projects a substantial increase in bankruptcy filings. Its U.S. Trustee Program has estimated that bankruptcy filings will double over the next three years. This prediction, although bold, is corroborated by the broader economic data, including escalating corporate bankruptcies, tightening loan standards by banks, and the surge in delinquent debt balances and consumer debt.

The current trajectory of bankruptcy filings is on a steep climb. Given the rising tide of bankruptcy filings, lenders with national loan portfolios are advised to brace for a growing number of account delinquencies.

ChatGPT-4 Analysis of the Bankruptcy Statistics

The dataset contains bankruptcy filing numbers for the years 2022, 2023, and 2024, with dates indicating the weekly periods. Let's proceed with an analysis that includes:

1. Trends over time: Analyzing how bankruptcy filings have changed week by week and year by year.
2. Comparative Analysis: Comparing the number of cases filed across the three years.
3. Statistical Overview: Providing a summary of the data, such as the average number of cases filed per week each year, the total number of filings per year, and identifying any significant peaks or drops.

The analysis of the bankruptcy filings data reveals several key insights:

Trend Analysis

• Yearly Trends: The number of bankruptcy filings has shown a clear upward trend from 2022 to 2023. The data for 2024 is incomplete, but the trend seems to continue upwards in the available data.
• Weekly Fluctuations: There are noticeable fluctuations on a week-by-week basis. This could be due to various economic factors, seasonal trends, or other external influences.

Statistical Overview

• 2022:Average weekly filings: 7,274Standard deviation: 1,091 (indicating moderate variability)Total filings: 378,258
• 2023:Average weekly filings: 8,558Standard deviation: 1,396 (higher variability than 2022)Total filings: 445,014
• 2024 (limited data):Average weekly filings: 7,209 (based on available data)Standard deviation: 1,310Total filings (so far): 28,835

Comparative Analysis

• There is a significant increase in bankruptcy filings from 2022 to 2023. The average weekly filings increased by about 1,284 cases from 2022 to 2023.
• The data for 2024 is limited (only 4 weeks available), but it shows a continuation of the upward trend seen in 2023.

Missing Data

• The dataset for 2024 is incomplete (only data for 4 weeks), indicated by NaN values in the dataset. This should be considered when interpreting the results for 2024.

Conclusion

The data suggests an overall increasing trend in bankruptcy filings over the years covered. The reasons behind this trend could be multifaceted, including economic conditions, changes in bankruptcy laws or policies, and other societal factors. It's important to supplement this data with additional context for a more comprehensive understanding. ​

Google Bard Analysis of the Bankruptcy Statistics

Here are some of the key observations I can make from the data:

• Continued Increase: We see a continuation of the increasing trend observed in 2023, with filings remaining higher than corresponding weeks in 2022.
• Early 2024 Fluctuations: While the trend leans towards ongoing increase, initial weeks of 2024 show some fluctuation compared to late 2023.

Specific Observations:

• Highest Weekly Filings: The highest point reached so far in 2024 data is Week 3 with 11,420 filings, comparable to the peak in Week 44 of 2023.
• Lowest Weekly Filings: The lowest point in 2024 data so far is Week 6 with 6,807 filings, showing a decrease compared to earlier weeks in 2024 but still higher than corresponding weeks in 2022.

Limitations:

• Incomplete Data: As the data only covers partial weeks of 2024, drawing definitive conclusions about the year's overall trend would be premature.
• Limited Scope: It's important to consider external factors such as economic health, policy changes, and natural disasters that might influence future filing numbers.

What We Are Reading

Want to know about the news articles that caught our eye this week? Start here.

• Credit Card Debt Is Up—and It’s Taking Longer to Pay Down: Customers of the biggest U.S. banks have steadily increased unpaid balances.
• More Americans Are Treating Their 401(k)s Like Cash Machines: signs of financial distress are evident as loans and emergency withdrawals increase.
• Auto Delinquencies on the Rise: In 2023, US banks' auto loan delinquency ratio reached its highest level of any year in the last decade, even as wage growth and unemployment signaled overall consumer health.
• How affordability woes could sink subprime borrowers: Amid inflation and rising interest rates, U.S. borrowers face affordability challenges, causing auto lenders to keep a close eye on borrowers’ ability — and willingness — to make their car payments.
• Clunky Old Software is the Invisible $1.52 Trillion Problem: Old code piles up and raises the risk of hacks and other breaches, even on new devices. Our compounding ‘technical debt.'