ICYMI: Bankruptcy Filings Take Sharp Drop
On August 1, 2022 the US Courts published the following information regarding bankruptcy filings:
Personal and business bankruptcy filings took a sharp drop in the twelve-month period ending June 30, 2022, falling 17.7 percent compared with the previous year.
According to statistics released by the Administrative Office of the U.S. Courts, annual bankruptcy filings totaled 380,634 in the year ending June 2022, compared with 462,309 cases in the previous year.
Business filings fell 31.1 percent, from 18,511 to 12,748 in the year ending June 30, 2022. Non-business bankruptcy filings fell 17.1 percent to 367,886, compared with 443,798 in the previous year.
Bankruptcy filings have fallen almost steadily since peaking in 2010. That trend has accelerated since the pandemic began in early 2020, despite some early COVID-related disruptions to the economy.
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BUSINESS AND NON-BUSINESS FILINGS, |
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| Year | Business | Non-Business | Total |
| 2022 | 12,748 | 367,886 | 380,634 |
| 2021 | 18,511 | 443,798 | 462,309 |
| 2020 | 22,482 | 659,881 | 682,363 |
| 2019 | 22,483 | 750,878 | 773,361 |
| 2018 | 22,245 | 753,333 | 775,578 |
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TOTAL BANKRUPTCY FILINGS BY CHAPTER, |
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| Year | Chapter | |||
| 7 | 11 | 12 | 13 | |
| 2022 | 239,750 | 4,429 | 201 | 136,169 |
| 2021 | 335,886 | 6,871 | 438 | 118,864 |
| 2020 | 436,919 | 7,568 | 589 | 237,099 |
| 2019 | 475,069 | 7,193 | 542 | 290,416 |
| 2018 | 479,151 | 7,141 | 475 | 288,741 |
These numbers come as no surprise. They are in line with the current economy, employment rate and recent collection efforts. Most households seem to have weathered the pandemic well. Delinquent debt is down and net worth is up.
This may continue as we expect President Biden to announce his Student Loan Debt Plan this afternoon. The student loan pause is being extended again through December 31, 2022. In addition to that, the Administration has provided the following information so far:
- $20,000 to be forgiven if you went to college on Pell Grants
- $10,000 to be forgiven if you didn’t receive Pell Grants
- Forgiveness only applies to those earning less than $125,000 (individual)
- Income Based Repayment: may be capped at 5% of your monthly income
We will have to wait to see what the additional details are; however, the additional extension and funds forgiven can give some continued breathing room to those that need it most during these difficult economic times.
So, those that may consider bankruptcy right now, are likely looking to a Chapter 13 in an attempt to save their home, car or the like.
As inflation continues and the economy works to rebound, we will have to see if this trend continues. Regardless, the attorneys at Walden & Pfannenstiel, LLC are here to assist you with your debt issues: Chapter 7 or Chapter 13.