Bankruptcy filings in the U.S. in 2018 were down by about 2 percent as compared to 2017, according to a statement by the American Bankruptcy Institute.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency, according to its statement.
ABI’s Jan. 8 statement is based on data accumulated by Epiq Systems, Inc., a “provider of managed technology for the global legal profession,” ABI said.
The total of all bankruptcy filings in 2018—755,182—is down from 766,761 filed in 2017.
Commercial filings and consumer cases were both down by about 2 percent.
The number of commercial Chapter 11 filings dropped by about 5 percent—5,470 in 2018 compared to 5,762 in 2017, but those numbers may be skewed. One big case can account for dozens of filings.
In very large Chapter 11 cases, sometimes called “mega-cases,” it’s common for there to be a number of cases filed separately for subsidiaries and affiliates. For example, when retailer Sears filed in October 2018, there were at least 50 separate debtors. The cases are consolidated for ease of administration.
Similarly, the March 2018 case for iHeartMedia, Inc., the radio and media giant, involved at least 39 separate cases.
Filings “fell for the ninth consecutive year, as high filing costs continue to weigh on struggling businesses and families,” Samuel J. Gerdano, ABI’s executive director, said.
Pending legislation proposing a new chapter of the bankruptcy code for companies with less than $2.5 million of debt might make filings more accessible for small businesses, so an increase in filings is possible if the bill becomes law.
The statement also lists the five states with the highest per capita filing rates—Alabama, Tennessee, Georgia, Mississippi, and Illinois, with a range of 5.63 filings per 1,000 people to 3.66 per 1,000 people.
To read more from Bankruptcy Law News pleaseOR Request Trial