US bankruptcy case counts expected to continue climbing in 2024: Report

US bankruptcy filings rose 18% in 2023 due to higher interest rates, tougher lending standards, and the continued end of pandemic era support measures, according to data from provider Epiq AACER. According to the data published on Wednesday, the total rose to 445,186 in 2023 from 378,390 in 2022. The report said commercial Chapter 11 business reorganisation filings increased by 72% in 2023, while consumer filings rose by 18%.

case counts are expected to continue rising in 2024, driven by the end of pandemic stimulus, higher interest rates, and rising delinquency rates. "As anticipated, we saw new filings in 2023 increase momentum over 2022 with a significant number of commercial filers leading the expected increase and normalization back to pre pandemic bankruptcy volumes," said Michael Hunter, vice president of Epiq AACER.

"We expect the increase in number of consumer and commercial filers seeking bankruptcy protection to continue in 2024 given the runoff of pandemic stimulus, increased cost of funds, higher interest rates, rising delinquency rates, and near historic levels of household debt." Overall consumer filing totals for calendar year 2023 were 419,559, representing an 18 percent increase from the 356,911 consumer filings the previous year.

"Though still below pre pandemic figures, bankruptcies in all filing categories climbed last year amid the evaporation of pandemic emergency responses, increased interest rates, and tougher lending standards," said ABI Executive Director Amy Quackenboss. "As interest rates remain elevated, increasing geopolitical tensions weigh on global supply chains and debt loads continue to grow, struggling businesses and families can turn to the proven process of bankruptcy for a financial fresh start." Total bankruptcy filings were 34,447 in December 2023, a 16 percent increase from the December 2022 total of 29,654.

The consumer bankruptcy filing total of 32,390 also represented a 16 percent increase from the 27,917 consumer filings in December 2022. Overall commercial filings increased 18 percent in December 2023, as the 2,057 filings were up from the 1,737 commercial filings registered in December 2022. Livemint tops charts as the fastest growing news website in the world to know more.

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