Bankruptcy filings in the U.S. jumped markedly in the first six months of 2023 compared to the same period last year according to data released this week by Epiq Bankruptcy.
The firm reported commercial Chapter 11 "reorganization" bankruptcies surged 68%, with filings for
small businesses climbing by 55%. Chapter 13 filings that allow individuals to repay a portion of their debts jumped by 23% in the first half of the year.
"The first six months of 2023 saw a nearly 70 percent increase of total commercial Chapter 11 bankruptcies," said Gregg Morin, Vice President of Business Development and Revenue at Epiq Bankruptcy. "This trend points to the economic trials businesses are facing right now, which are impacted by rising interest rates, inflation, and increased borrowing costs, to name a few."
The U.S. saw a sharp uptick in bankruptcy filings in the first half of 2023. (iStock / iStock)
Bankruptcy experts say myriad factors have contributed to the increase in Americans and businesses being pushed to the point of insolvency.
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"This past year, rising inflation, higher interest rates and the conclusion of government stimulus programs have put significant strain on U.S. consumers," said Amy Quackenboss, executive director of the American Bankruptcy Institute.
Quackenboss noted
consumer credit card debt is at historically high levels as individuals and families struggle to pay for the higher cost of necessary household goods and services. She told FOX Business "some are facing foreclosure on their homes because the cost of refinancing is prohibitive due to rising interest rates."
Kevin Carey, ABI’s immediate past president, pointed to rising
mortgage rates as another possible contributing factor to the rise in bankruptcies. He explained that Chapter 13
