Mom-and-Pop Business Bankruptcies Hit a Record as Debts Rise

[Nobody911]

This is not the sign of a booming economy. Americans from all walks of life are taking notice of this. This is why Trump's approval is so low and why an R+10 seat in Tennessee is seemingly competitive today in a special election, despite the Democratic candidate being a far left extremist.

High borrowing costs, cautious consumers and the Trump administration’s trade war are weighing on earnings for the smallest businesses while owners’ optimism fell to a six-month low in October. The number of Subchapter V cases is rising faster than the overall rate for Chapter 11 bankruptcies, which businesses and wealthy individuals typically use to restructure their debts.

Year to date through November, Subchapter V cases increased more than 8% to 2,221, compared to the same period last year, Epiq data show. At the same time, Chapter 11 petitions are up about 1% to a little more than 6,000. Epiq collects information from the federal courts on the various types of bankruptcies filed every day in the US.

MSN

Expanding US oil drilling can lower energy prices and boost some sectors, but it’s unlikely by itself to prevent broader small‑business bankruptcies or guarantee a stronger overall economy. Effects depend on scale, timing, global markets, and other policies.

Why drilling helps (channels)

• Lower fuel and energy costs: More domestic oil supply tends to reduce crude and gasoline prices (all else equal), easing costs for households and energy‑intensive businesses. That can raise real incomes and reduce short‑term bankruptcy pressure for some firms.
• Investment and jobs in oil sector: Drilling increases upstream and service‑sector employment and capital spending in producing regions, lowering local unemployment and boosting local demand.
• Trade and fiscal balance: Higher domestic production can reduce net energy imports and raise federal/state revenues (royalties, taxes) where production occurs.

Limits and countervailing factors

• Global market dominance: Oil is a global commodity. US supply increases may be offset by OPEC+ actions or weaker demand abroad; price effects can be smaller and slow to materialize.
• Timing lag: New drilling and production take months–years to scale. Immediate relief for small businesses is limited.
• Interest rates and credit: Many bankruptcies are driven by high borrowing costs, tight bank lending, and consumer demand. Drilling doesn’t directly lower interest rates or ease credit conditions.
• Sectoral mismatch: Benefits concentrate in energy‑producing regions and industries; many small businesses (restaurants, retail, services) may not see large gains.
• Inflationary context: If broader inflation remains high, any energy price relief may be partially offset elsewhere (wages, rents, supply chains).
• Regulatory/permits and legal limits: Policy changes can be slowed by permitting, legal challenges, and infrastructure constraints.

Net effect on bankruptcies

- Likely modest and uneven. Expanded drilling could reduce bankruptcies for firms sensitive to energy costs and in oil regions, but it won’t directly fix the main drivers cited in your excerpt (high borrowing costs, weak consumer demand). To materially lower nationwide small‑business bankruptcies you’d need broader improvements: lower interest rates, stronger consumer spending, targeted credit relief, or fiscal support.

sources:

• November Commercial Chapter 11 Filings Increased 20 Percent over 2024 | ABI
• Bankruptcy

 

[Woodznutz]

Greed remains the biggest contributor to the economic problem. No easy solution to that.