Total commercial Chapter 11 filings during the first six months of the year increased 5 percent to 2,854 from the 2,716 total filings during the same period in 2018, American Bankruptcy Institute reported. Total commercial filings also increased slightly to 19,531 during the first six months of 2019, a 2 percent increase from the 19,210 total commercial filings during the same period a year ago.
Total bankruptcies were nearly unchanged with a 0.04 percent increase, as the 388,463 filings during the first half of 2019 were slightly more than the 388,324 filings during the first six months of 2018. The 368,932 total consumer filings for the first half of 2018 represented a 0.05 percent drop from the consumer filing total of 369,114 for the first half of 2018.
Total commercial Chapter 11 bankruptcies for June were 425, representing a 38 percent increase from the 309 commercial Chapter 11 filings in June 2018, according to data provided by Epiq Systems, Inc. Total commercial bankruptcies slipped to 3,052 filings in June 2019 from the 3,079 registered in June 2018. Total bankruptcy filings in June 2019 fell 4 percent to 61,048 from the 63,753 total filings in June 2018. Noncommercial bankruptcies for June 2019 also decreased 4 percent, to 57,996 from the 60,674 filings in June 2018.
“Access to the financial fresh start of bankruptcy is crucial to struggling families and small businesses,” said ABI Executive Director Samuel J. Gerdano. “Elements of ABI’s Chapter 11 Reform Commission and Commission on Consumer Bankruptcy are being considered by Congress to modernize the Bankruptcy Code to remove barriers for financially distressed households and businesses.”
The House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law held a hearing on June 25 examining a number of bills and priority issues important to business and consumer bankruptcy practice. One bill considered was the “Small Business Reorganization Act” (S. 1091; H.R. 3311), which incorporates recommendations from ABI's Chapter 11 Commission to remove barriers to bankruptcy for financially struggling small and medium-sized businesses. Robert J. Keach of Bernstein Shur (Portland, Maine), a former ABI President and co-chair of the ABI Commission to Study the Reform of Chapter 11, testified on ABI's behalf.
The hearing also examined the “Family Farmer Relief Act of 2019” (H.R. 2336; S. 897), supported by ABI to raise the debt cap to $10 million for family farmers seeking chapter 12 protection, and the “Honoring American Veterans in Extreme Need Act of 2019” (HAVEN Act) (H.R. 2938; S. 679), to exclude VA and DoD disability payments from the monthly income calculation used for bankruptcy means testing. Holly Petraeus of ABI's Veterans Affairs Task Force testified on the legislation, which was incorporated into DoD appropriations legislation and has passed the Senate.
The subcommittee also looked at the issue of student loan debt treatment in bankruptcy, which is the subject of the first set of reform recommendations in the Final Report of the ABI Commission on Consumer Bankruptcy. Commissioners Prof. Dalié Jiménez of the UC Irvine School of Law and Ed Boltz of the Law Offices of John T. Orcutt, P.C. (Durham, N.C.) testified on the issue.
The average nationwide per capita bankruptcy filing rate for the first six calendar months of 2019 (Jan. 1-June 30) decreased slightly to 2.51 (total filings per 1,000 per population) from 2.53 for the first five months. The average total filings per day in June 2019 were 3,052, a 1 percent increase from the 3,036 total daily filings in June 2018. States with the highest per capita filing rate (total filings per 1,000 population) through the first six months of 2019 were:
- Alabama (5.57)
- Tennessee (5.36)
- Georgia (4.29)
- Mississippi (4.22)
- Illinois (3.78)
ABI has partnered with Epiq Systems, Inc. in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.