Small Business Subchapter V Elections Increase 60 Percent In April Over the Same Period Last Year
03 May 2024 - 10:00PM
Small business filings, captured as subchapter V elections within
chapter 11, increased 60 percent to 233 in April 2024 from 146 in
April 2023, according to data provided by Epiq AACER, the leading
provider of U.S. bankruptcy filing data. Commercial chapter 11
filings increased 40 percent in April 2024 to 542 from the 387
filings in April 2023. Overall commercial filings increased 39
percent in April 2024 to 2,569 from 1,846 in April 2023.
The 45,592 total U.S. bankruptcy filings in April 2024 increased
28 percent from the April 2023 total of 35,497. Noncommercial
bankruptcy filings also registered a 28 percent increase, to 43,023
in April 2024 from the April 2023 noncommercial total of 33,651.
The number of consumers filing for chapter 7 increased 33 percent
to 26,778 in April 2024 from the 20,199 who filed in chapter 7 last
year, while chapter 13 filings increased 21 percent to 16,172 in
April 2024 from the 13,398 chapter 13 filings in April 2023.
“In April 2024, we continued to see very strong double-digit
percentage year-over-year increases for both individual and
commercial new filers for bankruptcy protection,” said
Michael Hunter, vice president of Epiq AACER.
“These increases reflect the increased cost and expense pressures
both individuals and businesses are experiencing. Inflation has
gradually increased in the first three months of 2024. The recent
surge in insurance costs, including medical, auto, and home, and
the high interest rate environment continues to place additional
pressures on businesses and individuals. As tax season concludes, I
would expect the velocity of filings to increase as we approach the
summer months.”
“As interest rates remain at elevated levels and household debts
continue to climb, access to the financial fresh start of
bankruptcy is key for struggling businesses and consumers,” said
ABI Executive Director Amy Quackenboss. “With
enhanced eligibility for consumers and small business set to expire
at the end of June, we appreciate recent legislative efforts by
Congress to maintain greater access to a more efficient process for
small businesses and families to restructure their debt loads.”
The debt eligibility limit of $7.5 million for small businesses
looking to elect subchapter V reorganization under chapter 11 is
due to sunset back to $2,725,625 in late June. ABI's Subchapter V
Task Force on April 19 released its Final Report and
recommendations to Congress, and its findings support maintaining
the eligibility limit of $7.5 million in aggregate noncontingent,
liquidated debt for small businesses looking to reorganize under
subchapter V.
Sen. Richard Durbin (D-Ill.) and a group of bipartisan senators
last month introduced S. 4150 to extend key provisions of the
“Bankruptcy Threshold Adjustment and Technical Corrections Act”
that are due to sunset on June 21 for an additional two years to
2026. The legislation would maintain the debt limit at $7.5 million
for small businesses electing to file for bankruptcy under
subchapter V of chapter 11. The bipartisan measure also maintains
the debt limit for individual chapter 13 filings at $2.75 million
and removes the distinction between secured and unsecured debt for
that calculation.
April’s total bankruptcy filings represented a slight increase
of 3 percent from March’s total of 44,465. Total noncommercial
filings for April represented a 2 percent increase from the March
2024 noncommercial filing total of 42,010. The commercial filing
total represented a 5 percent increase from the March 2024
commercial filing total of 2,455. Commercial chapter 11 filings
decreased 11 percent from the 610 filings in March 2024. Subchapter
V elections within chapter 11 increased 7 percent from 218 the
previous month. Consumer chapter 7 filings saw an increase of 3
percent over the 26,115 chapter 7s filed in March 2024, while 13
filings increased 2 percent over the 15843 filings last month.
Epiq AACER is a division of Epiq and is the leading provider of
data, technology, and services for companies operating in the
business of bankruptcy. Its Bankruptcy Analytics subscription
service provides on-demand access to the industry’s most dynamic
bankruptcy data, updated daily. Learn more at
https://bankruptcy.epiqglobal.com.
About Epiq
Epiq, a global technology-enabled services leader to the legal
industry and corporations, takes on large-scale, increasingly
complex tasks for corporate counsel, law firms, and business
professionals with efficiency, clarity, and confidence. Clients
rely on Epiq to streamline the administration of business
operations, class action and mass tort, court reporting,
eDiscovery, regulatory, compliance, restructuring, and bankruptcy
matters. Epiq subject-matter experts and technologies create
efficiency through expertise and deliver confidence to
high-performing clients around the world. Learn more at
https://www.epiqglobal.com.
About ABI
ABI is the largest multi-disciplinary, nonpartisan organization
dedicated to research and education on matters related to
insolvency. ABI was founded in 1982 to provide Congress and the
public with unbiased analysis of bankruptcy issues. The ABI
membership includes nearly 10,000 attorneys, accountants, bankers,
judges, professors, lenders, turnaround specialists and other
bankruptcy professionals, providing a forum for the exchange of
ideas and information. For additional information on ABI, visit
www.abi.org. For additional conference information, visit
http://www.abi.org/calendar-of-events.
Press Contacts
Carrie Trent Epiq, Director of
Communications Carrie.Trent@epiqglobal.com
John Hartgen ABI, Public Affairs
Officerjhartgen@abi.org