July 6th, 2020
JUNE INSIGHT REPORT
Chapter 7 Filings Continue to Rise
According to data in the latest AIS Insight Report, June bankruptcies totaled to 42,411 representing a 30.56% decrease from the 61,078 filed in June 2019 (Figure 1). Chapter 7 bankruptcies accounted for nearly 75% of all filings and Chapter 11 bankruptcies increased again, up 46% over the same month last year. Total bankruptcy filings were up 6.08% from the previous month (May 2020) (Figure 1).
As per our month-over-month comparison, there was a 6.08% increase; the number of filings in June 2020 reached 42,411 as compared to 39,981 the previous month (Figures 1). This is the first time in three months where we have seen a rise in bankruptcy filings. The increase in bankruptcy filings could be attributed to state re-openings occurring across the country.What’s most interesting is that chapter 7 bankruptcies accounted for nearly 75% of all filings in June 2020. Per our proprietary data, Chapter 13 filings totaled to 9,478 in June 2020 as compared to 19,882 in March 2020 (Figure 2).
Cheryl Skigin, Partner at AIS Law, speculates that high unemployment numbers mean debtors may not have the financial ability to pay in a Chapter 13. A viable income stream is needed to set up a payment plan and feasibility is an essential element of plan confirmation or even getting past a Trustee’s early motion to dismiss.
Total commercial chapter 11 bankruptcies increased by nearly 46% as compared to the over the same month last year. Commercial chapter 11 bankruptcies totaled to 663 in June 2020 compared to 455 in June 2019 (Figure 4). Total chapter 11 subchapter V bankruptcies totaled to 133, which was up from the total of 109 from last month.
The highest percentage of bankruptcies for June 2020 came from the South (East) (27%) followed by North Central (East) (20%), South (West) (14%), Pacific (14%), Northeast (11%), Mountain (8%) and North Central (West) (6%) regions of the country (Figure 5).
The AIS Insight Report is a proprietary report created by AIS using data derived sole from information obtained by the Federal Bankruptcy Court System and the latest in bankruptcy analytical tools.
To download the full June Insight Report, click here.