The bankruptcy filing by WeWork, Inc. in November propelled November commercial chapter 11 filings to 842, an increase of 141 percent over the 349 filings registered in November 2022, according to data provided by Epiq Bankruptcy.
The case filed by WeWork, Inc. on Nov. 6 included 517 related filings, according to an ABI analysis, representing the third-most related filings in a case since the Bankruptcy Code became effective in 1979.
Overall commercial filings increased 21 percent to 2,252 in November 2023, up from the 1,864 commercial filings registered in November 2022. Small business filings, captured as subchapter V elections within chapter 11, increased 79 percent to 181 in November 2023, up from 101 in November 2022.
Total bankruptcy filings were 37,860 in November 2023, a 21 percent increase from the November 2022 total of 31,187. Individual bankruptcy filings also registered a 21 percent year-over-year increase, as the 35,608 in November 2023 represented an increase over the 29,323 filings in November 2022. There were 20,250 individual chapter 7 filings in November 2023, a 23 percent increase over the 16,421 filings recorded in November 2022, and there were 15,280 individual chapter 13 filings in November 2023, a 19 percent increase over the 12,862 filings the previous November.
“Individual bankruptcy filings continue to rise as support from government stimulus and lender forbearance programs recedes, and ongoing price inflation and higher lending rates put pressure on household balance sheets,” said Todd Madsen, AACER Vice President. “Commercial filings also continue to rise as businesses struggle to refinance debt in today’s higher rate environment."
"The rebound in filings seen this year is a reflection of the challenging economic environment resulting from the evaporation of pandemic responses, including government stimulus, low interest rates and looser lending terms," said ABI Executive Director Amy Quackenboss. "Bankruptcy provides a reliable beacon to consumers and businesses struggling to navigate the financial terrain of higher interest rates, tighter lending terms and elevated pricing."
Most categories of bankruptcy filings decreased slightly from the previous month. Only commercial chapter 11 filings registered an increase, bolstered by the WeWork filings. Commercial chapter 11s increased 31 percent from October’s 645 filings. Total and consumer bankruptcies both decreased 7 percent when compared to their respective October filing totals of 40,663 for total filings and 38,287 for consumer filings. Individual chapter 7s decreased 9 percent, and chapter 13s decreased 4 percent, from October’s filings. Overall commercial filings decreased 5 percent from the 2,376 filings registered in October. Subchapter V elections within chapter 11 decreased 2 percent from the 185 filed in October 2023.