Commentary

November 2nd, 2020

OCTOBER INSIGHT REPORT

Bankruptcy Filings Continue to Fall Despite Pandemic, High Unemployment

According to the latest AIS Insight Report, October bankruptcies totaled to 40,171 reflecting a slight uptick from the previous month (Figure 1). However, filings were still down 40.76% from October 2019.

We’ve continued to monitor the activity of Chapter 7 and Chapter 13 bankruptcy filings. Our October analysis revealed that filings are still well below the monthly averages (Figure 1). Chapter 7 bankruptcies yielded a 32% decrease from the 42,222 filings recorded in October 2019 (Figures 2 & 3). Chapter 13 bankruptcies reflected a 56% decrease from the 24,958 filings in October 2019 (Figures 2 & 3).

Bankruptcy Statistics Report - October2020 Figure 1 

AIS Insight Report - October 2020 - Chapter 7 and Chapter 13

Figure 2

AIS Insight Report - October 2020 - Percentage of total bankruptcy filings

Figure 3

October Chapter 11 bankruptcies increased by 8% as compared to October 2019 (Figure 4). Chapter 11 bankruptcies totaled to 615 in October 2020 as compared to a total of 568 filings in October 2019 (Figure 4). Chapter 11s are up 30.94% YTD compared to 2019. In our month-over-month analysis, we observed Chapter 11 filings have decreased by 23% and Chapter 11, Subchapter V filings have decreased by 6% (Figure 4).

AIS Insight Report - October 2020 - Chapter 11 Bankruptcy

Figure 4  

AIS Insight Report - October 2020 - Chapter 11 Bankruptcy Graph

Figure 5

AIS Insight Report – October 2020 – Chapter 11 Bankruptcies – Sub Chapter 5

Figure 6

The highest percentage of bankruptcies for September 2020 came from the South (East) (28%) followed by North Central (East) (20%), Pacific (14%), South (West) (13%), Northeast (12%), Mountain (7%) and North Central (West) (6%) regions of the country (Figure 7).

AIS Insight Report – October 2020 – Region wise Bankruptcy Filings

Figure 7

As mentioned in previous months, data confirms that 2020 continues to be an unusual year (Figure 8). A five-year analysis of bankruptcy filings shows a major trend deviation.

AIS Insight Report – October 2020 – Total bankruptcies 2015 to 2020

Figure 8

As detailed in The Wall Street Journal, there is a growing danger that our country is facing. New challenges, like cold weather and exhausted financial resources, lie ahead and could drastically impact American households and small businesses. We will monitor new challenges, the effects of stimulus checks, forbearances, and moratorium programs and provide critical insights.

To download the full October Insight Report, click here.