*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 July 22nd, 2024)

Bankruptcy filings continue their upward trajectory. Chapter 7 filings—a lifeline for many struggling households—increased by 12.01% year-over-year (5,102 in 2023 to 5,715 in 2024). Chapter 13 filings, allowing individuals to restructure their debt, increased by 5.13% year-over-year (3,373 in 2023 to 3,546 in 2024). Chapter 11 filings, often used by businesses dealing with insolvency, increased by 31.68% year-over-year (101 in 2023 to 133 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-4o Analysis of this Week's Bankruptcy Statistics

1. Overview of this week's National filings: This week, the United States saw a total of 5,715 Chapter 7 bankruptcy filings, 3,546 Chapter 13 filings, and 133 Chapter 11 filings. These numbers reflect ongoing financial struggles among individuals and businesses. The Chapter 7 filings, which are the most common, indicate widespread financial distress and inability to repay debts. Chapter 13 filings, which allow for debt restructuring, show significant activity, indicating that many are seeking to reorganize their financial obligations. The Chapter 11 filings, though lower in number, highlight the challenges faced by businesses in maintaining solvency.

2. An interesting fact about this week's filings: This week, the Central District of California (CAC) recorded the highest number of Chapter 7 filings with 430 cases. This district consistently shows a high volume of bankruptcy filings, reflecting the economic pressures in that region. Following CAC, the Middle District of Florida (FLM) had 365 Chapter 7 filings, showcasing another hotspot of financial distress. Interestingly, the Northern District of Illinois (ILN) also reported 195 Chapter 7 filings, indicating a notable regional disparity. These concentrations help pinpoint areas with significant economic challenges.

3. Overview of this week's district-level filings: At the district level, the Central District of California (CAC) led with 430 Chapter 7 filings this week. The Middle District of Florida (FLM) and the Northern District of Illinois (ILN) followed with 365 and 195 filings respectively. Additionally, the Northern District of Ohio (OHN) reported 194 Chapter 7 filings, while Arizona (AZ) had 189 filings. These figures illustrate the regional hotspots of bankruptcy activity. Such data points are crucial for understanding the localized nature of financial distress.

4. Geographic (district) disparities in filings: There are significant geographic disparities in bankruptcy filings across different districts. The Central District of California (CAC) alone recorded 430 Chapter 7 filings, significantly higher than other districts. This contrasts sharply with smaller districts, such as Alaska (AK), which typically reports much lower numbers. The disparity suggests varying economic conditions and stresses across regions. These differences necessitate tailored economic policies to address specific regional needs effectively.

5. Current year focus: This year has seen a notable rise in bankruptcy filings compared to the previous year. This week alone, Chapter 7 filings reached 5,715, while Chapter 13 filings stood at 3,546. These figures indicate a year-over-year increase, reflecting the persistent economic difficulties faced by many. The rise in Chapter 11 filings to 133 cases this week underscores ongoing business insolvencies. Monitoring these trends throughout the year will be critical for understanding the broader economic impact and informing policy decisions.

6. Comparative analysis with previous years: Compared to the same period last year, there has been a substantial increase in bankruptcy filings. Chapter 7 filings have increased by 12.01% from 5,102 last year to 5,715 this week. Similarly, Chapter 13 filings have risen by 5.13%, indicating growing financial restructuring needs. Chapter 11 filings, often associated with business insolvency, saw a significant 31.68% increase from 101 to 133 filings. This comparative analysis highlights the escalating financial distress across the country.

7. Analyzing the filings per capita: This week, Chapter 7 filings per capita were approximately 17.27 per million people, and Chapter 13 filings were around 10.71 per million. These rates provide a clearer understanding of the prevalence of bankruptcy filings relative to the population. Chapter 11 filings, though less frequent, stood at about 0.40 per million people. Analyzing filings per capita helps gauge the extent of financial distress among the population. These figures can inform targeted economic relief efforts.

8. Analyzing the changing filings per capita: Over the past few years, the per capita bankruptcy filings have shown an upward trend. This week, Chapter 7 filings per capita increased to 17.27 per million, up from previous years. Chapter 13 filings also rose to 10.71 per million, indicating a steady increase in financial restructuring efforts. The rise in Chapter 11 filings to 0.40 per million reflects ongoing business financial challenges. These changing rates highlight the growing financial pressures faced by individuals and businesses alike.

9. Forecast the expected filing numbers and trends for the rest of the year: If the current trends continue, bankruptcy filings are expected to rise steadily through the rest of the year. Chapter 7 filings could potentially surpass 300,000 by year's end, given the current weekly averages. Chapter 13 filings might exceed 180,000, reflecting continued efforts at debt restructuring. Chapter 11 filings are projected to remain elevated, potentially reaching around 7,000 cases by the end of the year. These forecasts underscore the need for sustained economic support and intervention.

10. Forecast the trends of increasing filings for years after 2024: Beyond 2024, bankruptcy filings are likely to remain high if current economic conditions persist. Factors such as inflation, rising interest rates, and job market instability could continue to drive financial distress. Chapter 7 and Chapter 13 filings are expected to remain elevated, reflecting ongoing struggles among households. Businesses may continue to face insolvency challenges, keeping Chapter 11 filings high. Long-term economic policies will be crucial in addressing these trends and mitigating future increases in bankruptcy filings.

Claude Analysis of this Week's Bankruptcy Statistics

1. Nationwide bankruptcy filings for the week ending March 30, 2024 totaled 9,394, with Chapter 7 filings accounting for 60.84% (5,715) of the total. Chapter 13 filings made up 37.75% (3,546) of cases, while Chapter 11 and Chapter 12 comprised 1.42% (133) of filings. The Central District of California led with 578 total filings, followed by the Middle District of Florida with 365 and the Northern District of Illinois with 332. Interestingly, 10 districts reported no Chapter 7 filings for the week, potentially indicating localized economic stability or filing backlogs.

2. An intriguing aspect of this week's filings is the significant spike in Chapter 11 cases in the Southern District of New York, with 21 filings compared to its weekly average of 4.85 for the year. This surge represents a 333% increase over the district's typical weekly Chapter 11 activity, potentially signaling distress in the business sector of this economically vital region. Additionally, the District of Puerto Rico saw an unusual uptick in Chapter 12 filings with 5 cases, representing 21.74% of all Chapter 12 filings nationwide for the week. The Northern District of Texas also stands out with 24 Chapter 11 filings, the highest for any district this week, suggesting possible challenges in its business environment.

3. At the district level, notable disparities emerge in filing patterns. The Central District of California not only led in total filings but also in Chapter 7 (332) and Chapter 13 (236) cases. The Southern District of Florida reported the highest number of Chapter 11 filings (24) outside of New York and Texas. Surprisingly, the Eastern District of Michigan, typically a high-filing district, recorded only 95 total filings, less than half of its 2024 weekly average of 219.9. The Western District of Pennsylvania saw an unusual spike with 101 Chapter 13 filings, nearly double its 2024 weekly average of 54.7.

4. Geographic disparities in bankruptcy filings are evident across districts. While populous districts like Central California, Middle Florida, and Northern Illinois consistently report high filing numbers, some smaller districts show disproportionately high filing rates relative to their population. For instance, the Middle District of Alabama reported 150 total filings, a high number considering its smaller population base. Conversely, some larger population centers like the Eastern District of New York reported relatively low filing numbers (114) compared to similarly sized districts. The District of Puerto Rico's 90 total filings, including 5 Chapter 12 cases, highlight unique economic challenges faced by territories.

5. Focusing on the current year, 2024 has seen a total of 123,202 bankruptcy filings through week 13, averaging 9,477 filings per week. Chapter 7 filings account for 59.87% of the total, with Chapter 13 at 38.55%, indicating a slight shift towards Chapter 7 compared to the previous year. The Southern District of Florida has emerged as a hotspot, with 6,566 total filings year-to-date, surpassing traditionally high-filing districts like the Northern District of Illinois (5,254). Chapter 11 filings have shown particular strength in 2024, with 1,780 cases filed nationwide, representing a 28.15% increase over the same period in 2023.

6. Comparing 2024 to previous years reveals an accelerating trend in bankruptcy filings. The weekly average of 9,477 filings in 2024 represents a 9.76% increase over the 2023 average of 8,633 and a substantial 23.87% jump from the 2022 average of 7,651. Chapter 7 filings have seen the most significant growth, with the 2024 weekly average of 5,675 marking a 14.49% increase from 2023 and a 31.43% surge from 2022. Interestingly, Chapter 12 filings have remained relatively stable across years, averaging around 23 weekly filings, suggesting consistent challenges in the agricultural sector.

7. Analyzing filings per capita provides insight into the relative impact of bankruptcies across districts. Using 2020 census data for district populations, the Middle District of Alabama stands out with approximately 29.4 filings per 100,000 residents this week, significantly higher than the national average of 2.8 per 100,000. The Northern District of Illinois, despite its high absolute numbers, has a more modest rate of 6.9 filings per 100,000 residents. Notably, the District of Puerto Rico's filing rate of 2.8 per 100,000 aligns closely with the national average, despite its unique economic challenges.

8. The changing filings per capita over time reveal evolving economic pressures across regions. The Middle District of Florida has seen its filing rate increase from an average of 4.7 per 100,000 residents in 2023 to 5.9 in 2024, a 25.53% jump. Conversely, the Eastern District of Michigan has experienced a decrease from 6.1 to 5.4 filings per 100,000 residents, suggesting some economic improvement. The Western District of Tennessee has maintained a consistently high filing rate, averaging 7.8 per 100,000 residents in both 2023 and 2024, indicating persistent economic challenges in the region.

9. Forecasting filing numbers for the remainder of 2024, we can expect the upward trend to continue, potentially reaching a weekly average of 10,000 filings by year-end. This projection is based on the 9.76% year-over-year increase observed so far and accounts for seasonal variations typically seen in bankruptcy filings. Chapter 7 filings are likely to maintain their dominant position, potentially reaching 62% of total filings by December 2024. The Southern District of Florida and the Middle District of Florida are on track to surpass 20,000 total filings each for the year, reflecting ongoing economic pressures in these regions.

10. Looking beyond 2024, the trend of increasing bankruptcy filings is likely to persist, albeit at a potentially slower rate. Assuming economic conditions and legislative frameworks remain relatively stable, we might expect a 5-7% annual increase in total filings for 2025 and 2026. Chapter 11 filings could see more volatility, potentially spiking in response to any economic downturns or changes in business environments. The gap between high-filing and low-filing districts may widen further, with economically challenged regions potentially seeing filing rates increase at 1.5 to 2 times the national average.

ChatGPT-4 Analysis of this Week's Bankruptcy Statistics

1. Overview of this week's National filings: This week, a total of 5,715 Chapter 7 filings were reported nationally, marking a significant portion of the bankruptcy activities. Chapter 13 filings followed with 3,546 cases, reflecting a consistent demand for restructuring options. The less common Chapter 11 filings, predominantly utilized by businesses, saw 133 new cases. Additionally, there were 14 Chapter 12 filings, which are specifically designed for family farmers and fishermen.

2. An interesting fact about this week's filings: Chapter 11 filings this week saw a notable increase of 31.68% compared to last year, which is the highest growth among all bankruptcy types. This suggests a rising trend of businesses facing financial distress severe enough to seek reorganization rather than liquidation.

3. Overview of this week's district-level filings highlighting interesting data points with reference to the actual district filing numbers: The Southern District of Alabama reported a total of 15 Chapter 7 filings, indicating a stable but significant amount of personal bankruptcies. Meanwhile, the Central District of California observed 430 Chapter 7 filings, the highest in the nation, emphasizing the larger economic pressures in that region.

4. Geographic (district) disparities in filings: Districts vary greatly in their bankruptcy filings. For instance, the Western District of Washington reported 34 Chapter 13 filings, one of the highest in the country, contrasting with many smaller districts that reported none or very few such filings. This reflects differing regional economic conditions and possibly varying access to legal and financial resources.

5. Current year focus: In 2024, the trend has shown an increase in bankruptcies across most chapters compared to 2023. The consistent rise in Chapter 7 and 13 filings indicates ongoing financial challenges for individuals, whereas the sharp rise in Chapter 11 filings points to increasing corporate financial distress.

6. Comparative analysis with previous years: Comparing the current week’s data with the same period in previous years shows a gradual increase in filings across all chapters. This uptick may be indicative of broader economic trends or changes in bankruptcy law and its perceptions by debtors.

7. Analyzing the filings per capita: When looking at filings per capita, districts with smaller populations but high bankruptcy rates stand out. For example, the Eastern District of Arkansas, with relatively fewer residents, reported 30 Chapter 7 filings, suggesting a disproportionate impact of economic hardship on this community.

8. Analyzing the changing filings per capita: Over the years, filings per capita have been increasing in specific districts, reflecting changing local economic conditions. Districts heavily reliant on certain industries, such as manufacturing or agriculture, might be seeing varying trends based on industry health.

9. Forecast the expected filing numbers and trends for the rest of the year: Based on the current trajectory and economic forecasts, bankruptcy filings are expected to continue rising. Chapter 7 and 13 filings may increase by approximately 10-15% by the end of 2024, with Chapter 11 filings potentially seeing an even larger increase if economic conditions for businesses worsen.

10. Forecast the trends of increasing filings for years after 2024: Looking beyond 2024, if current economic pressures persist, such as inflation or high interest rates, bankruptcy filings could continue to rise. Long-term trends might also be influenced by changes in bankruptcy laws or economic recovery strategies deployed at the federal or state levels.

Gemini Advanced Analysis of this Week's Bankruptcy Statistics

• Consistent Chapter 7 Filings: The average number of Chapter 7 bankruptcy filings remained relatively consistent across 2022 and 2023, with averages of 4387.52 and 4990.15 respectively. This suggests a steady rate of individuals or businesses seeking debt relief through liquidation.
• Rise in Chapter 11 Filings: There was a notable increase in the average number of Chapter 11 bankruptcy filings from 81.93 in 2022 to 130.67 in 2023. This could indicate a growing trend of businesses opting for reorganization to address financial distress.
• Rare Chapter 12 Filings: Chapter 12 bankruptcies, designed for family farmers and fishermen, were the least common type, with averages of 2.83 in 2022 and 2.48 in 2023. This highlights the specialized nature of this bankruptcy category.
• Steady Chapter 13 Filings: The average number of Chapter 13 bankruptcy filings, often used for individual debt adjustment, saw a slight increase from 2971.86 in 2022 to 3436.54 in 2023. This suggests a consistent demand for this type of debt restructuring.
• Monthly Fluctuations: While yearly averages provide insights, there were significant fluctuations in bankruptcy filings on a month-to-month basis. For example, in 2023, the total number of filings ranged from 56,992 in January to 89,176 in March, highlighting the dynamic nature of bankruptcy trends.
• Chapter 7 Dominance: Chapter 7 bankruptcies consistently accounted for the largest share of filings, contributing to 68.57% of the total. This underscores the prevalence of liquidation as a bankruptcy strategy.
• Growing Chapter 11 Share: While still a smaller proportion, the share of Chapter 11 bankruptcies increased from 1.16% in 2022 to 1.50% in 2023. This could reflect a changing landscape of business bankruptcies.
• Minimal Chapter 12 Share: Chapter 12 bankruptcies remained a negligible fraction of the total, accounting for only 0.04% in both years. This emphasizes the niche nature of this bankruptcy type.
• Stable Chapter 13 Share: The share of Chapter 13 bankruptcies remained relatively stable, hovering around 31.39% in both years. This suggests a consistent preference for debt adjustment plans among individuals.
• Increasing Trend in 2024: The data for 2024, although incomplete, reveals an increasing trend in bankruptcy filings across all chapters. If this trend continues, 2024 could see a higher number of bankruptcies compared to previous years.

What We Are Reading

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

• Credit card delinquencies are on the rise: Research from the New York Federal Reserve shows nearly a fifth of borrowers are “maxed-out.”
• Subprime Auto Loans Are Getting Messy: Huge profits in subprime caused specialized dealers/lenders to take big risks, which came home to roost.
• Red Lobster Files for Bankruptcy: Coincidentally, it happened right after an endless shrimp promotion.
• SFTP vs. API: We've been discussing this with many of our partners and clients. Luckily, we do both!
• 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.'