The rise in business bankruptcies and overall bankruptcy filings in the US over the twelve-month period ending September 30, 2023, reflects a concerning financial trend. Here’s a detailed breakdown based on the information provided and additional insights:
- Overall Increase in Bankruptcies:
- The US witnessed a 13% rise in total bankruptcy filings during the specified twelve-month period. Specifically, bankruptcy filings increased from 383,810 cases to 433,658 cases1. The month of August 2023 saw more than 39,000 bankruptcy cases filed, marking an 18% rise compared to the same period the previous year2345.
- Business Bankruptcies:
- Bankruptcy Trends:
- This rise in bankruptcy filings was described as a "moderate rebound" following a significant decline over more than a decade, which had been exacerbated by the onset of the COVID-19 pandemic61. Despite this rebound, the total bankruptcy filings are still significantly lower than the peak observed in September 2010, when filings neared 1.6 million1.
- August 2023 Specifics:
- Chapter 11 Filings:
- There was also a notable increase in commercial Chapter 11 filings, which grew by 29% to 573 in September 2023 from the 455 filings recorded in September 2022, further underlining the financial distress experienced by commercial entities9.
The data depicts a scenario of escalating financial distress among both individuals and businesses. The upward trend in bankruptcies over 13 consecutive months suggests a materializing growth in bankruptcy filings, potentially driven by lingering economic challenges from the pandemic era and other financial hardships. The situation warrants a careful examination by policymakers and financial institutions to devise supportive measures for affected entities and individuals.
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