By Tom Gantert (The Center Square)
The number of commercial bankruptcy filings is up 31% in May 2023 from May 2022, according to a report from a company that tracks bankruptcy filings.
According to Epiq Bankruptcy, there were 2,324 commercial filings in May 2023 compared to 1,771 registered in May 2022.
The total number of bankruptcy filings was 38,669 in May 2023, an increase of 9% from April 2023 and an increase of 23% from May 2022.
Commercial Chapter 11 filings saw the biggest increase, according to Epiq’s press release. Such bankruptcies rose from 332 in May 2022 to 680 in May 2023.
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According to US courts, “A case filed under Chapter 11 of the United States Bankruptcy Act is often referred to as a ‘reorganization’ bankruptcy. Usually the debtor remains ‘in possession’, has the powers and duties of a receiver, is allowed to continue his business and, with the court’s permission, is allowed to borrow new money. A reorganization plan is proposed, creditors whose rights are affected can vote on the plan, and the plan can be confirmed by the court if it receives the required votes and meets certain legal requirements.”
Individual bankruptcy filings increased from 29,559 in May 2022 to 36,345 total bankruptcy filings in May 2023, an increase of 23%.
“Rising interest rates, inflation and higher borrowing costs can present a daunting economic challenge for struggling families and businesses,” said Amy Quackenboss, executive director of the American Bankruptcy Institute, in a press release. “In the midst of this ongoing economic pressure, bankruptcy provides financially distressed businesses and households with access to a relief valve.”
Syndicated with permission from Center Square.
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