United States Bankruptcy Courts: Overview and Analysis of Bankruptcy Filings for the 12-Month Period Ending June 30, 2024

United States Bankruptcy Courts: Overview and Analysis of Bankruptcy Filings for the 12-Month Period Ending June 30, 2024

CRS INSIGHT Prepared for Members and Committees of Congress

INSIGHTi

United States Bankruptcy Courts: Overview and Analysis of Bankruptcy Filings for the 12- Month Period Ending June 30, 2024

October 28, 2024

This Insight provides information and statistics related to bankruptcy filings in the United States bankruptcy courts for the 12-month period ending June 30, 2024 (this is the most recent reporting period for which data are available). While the Insight provides information and data analysis related to bankruptcy filings statistics, it does not provide legal analysis.

Number of Filings

For the 12-month period ending June 30, 2024, the overall number of bankruptcy filings increased by 16.2% compared to the 12-month period ending June 30, 2023—increasing from 418,724 to 486,613.

Business Filings

Figure 1 shows the number of business and nonbusiness bankruptcy filings for each 12-month period ending June 30 from 2001 to 2024. As shown by the figure, for the 12-month periods ending on June 30 from 2001 to 2024, business bankruptcy filings peaked in 2010 (59,608 filings). Most recently, for the 12- month period ending June 30, 2024, business bankruptcy filings increased from 15,724 to 22,060 (a 40.3% increase).

The average number of business bankruptcy filings by district court for the 12-month period ending June 30, 2024, was 241 (the median number of filings was 108).

The five district courts with the greatest number of business bankruptcy filings during this period were courts for the Central District of California (1,536 filings), District of Delaware (1,533), District of New Jersey (1,365), Southern District of Texas (1,223), and Eastern District of New York (1,092).

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Figure 1. Number of Business and Nonbusiness Bankruptcy Filings

(For each 12-month period ending on June 30 from 2001 to 2024)

Figure is interactive in the HTML version of this Insight.

Source: CRS compilation of publicly available data provided by the Administrative Office of U.S. Courts.

Nonbusiness Filings

For each 12-month period included in Figure 1, nonbusiness filings comprised a much greater percentage of total bankruptcy filings than business filings (ranging from a low of 94.8% of all bankruptcy filings in 2010 to a high of 98.0% of all filings in 2005).

As shown by Figure 1, for the 12-month periods ending June 30 from 2001 to 2024, nonbusiness bankruptcy filings peaked in 2003 (1,613,097 filings). The sharp drop-off in nonbusiness filings for the 12-month period ending June 30, 2007, likely reflects changes made to bankruptcy laws in 2005 with the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Nonbusiness filings increased again as a result of the Great Recession, which began in December 2007, but did not return to pre-BAPCPA levels.

Most recently, for the 12-month period ending June 30, 2024, nonbusiness filings increased from 403,000 to 464,553 (a 15.3% increase). Nonbusiness bankruptcy filings may increase further, with one bankruptcy observer stating in July 2024 that he expects “a strong demand in individual filings ahead of us, especially considering the large increase in commercial filings, consumer debt levels, high interest rates, and overall increased costs with relatively flat household income. The timeframe from the onset of individual financial stress to a bankruptcy filing is generally six to 18 months.”

The average number of nonbusiness bankruptcy filings by district court for the 12-month period ending June 30, 2024 was 5,101 (the median number of filings was 4,028).

The five district courts with the greatest number of nonbusiness bankruptcy filings during this period were courts for the Central District of California (20,088 filings), Northern District of Illinois (19,788), Northern District of Georgia (17,845), Middle District of Florida (17,413), and Eastern District of Michigan (16,204).

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Filings by Bankruptcy Chapter

Figure 2 provides, for the 12-month period ending June 30, 2024, the number and percentage of business and nonbusiness filings that were filed under each chapter of the Bankruptcy Code. For both business and nonbusiness filings, Chapter 7 was the most common chapter used by debtors during this period (comprising 52.7% of business filings and 58.8% of nonbusiness filings). Under Chapter 7, any assets of a debtor not exempt from creditors are reduced to money and the proceeds are distributed to creditors.

Figure 2. Filings by Bankruptcy Chapter

(For 12-month period ending June 30, 2024)

Source: CRS compilation of publicly available data provided by the Administrative Office of U.S. Courts.

For business filings, Chapter 11 was the second-most common bankruptcy chapter (37.8% of filings). Under Chapter 11, an individual or, more typically, a business reorganizes its debt while continuing its operations. The third-most common chapter for business filings, Chapter 13 (7.2% of filings), can be used when an individual is the sole proprietor of a business.

For the 12-month period ending June 30, 2024, business bankruptcy filings increased across each of the three main bankruptcy chapters compared to the 12-month period ending June 30, 2023. Specifically, business filings increased by 33.4% under Chapter 7, by 49.6% under Chapter 11, and by 35.3% under Chapter 13. The increase in business bankruptcy filings has been attributed, in part, to high interest rates, supply chain issues, and slowing consumer spending. Additionally, for the one-month period from June 1, 2024, through June 30, 2024, the number of corporate bankruptcy filings was “the highest number recorded in a single month since at least the start of 2020.”

For nonbusiness filings, Chapter 13 was the second-most common bankruptcy chapter (41.1% of filings). Chapter 13, sometimes called “wage-earner bankruptcy,” is typically used by an individual consumer to reorganize his or her finances and to adopt a repayment plan that is required to be completed within a specified period of time.

Compared to the 12-month period ending June 30, 2023, nonbusiness bankruptcy filings increased across two of the three main bankruptcy chapters for the 12-month period ending June 30, 2024. Filings decreased for one chapter during this same period. Specifically, nonbusiness filings increased by 18.6% under Chapter 7, decreased by 8.1% under Chapter 11, and increased by 10.8% under Chapter 13.

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IN12452 · VERSION 1 · NEW

Author Information

Barry J. McMillion Analyst in American National Government

Disclaimer

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