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Bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts under the supervision of a bankruptcy court. Bankruptcy statistics are important indicators of the economic and financial health of a country. Learn about the scope of bankruptcy filings in the United States and bankruptcy statistics by type.
Bankruptcy filings decreased by 6.3% in 2022, continuing a drop that started at the beginning of the COVID-19 pandemic, according to the U.S. Courts.
The decline in bankruptcy filings at the start of the pandemic can be attributed to the government’s stimulus packages and the moratorium on evictions and foreclosures due to the COVID-19 pandemic.
There are three main types of bankruptcy filings in the United States: Chapter 7, Chapter 11, and Chapter 13. Below we take a look at bankruptcy statistics by type of bankruptcy.
Chapter 7 bankruptcy is the most common type of bankruptcy filing in the United States.
It is also known as “liquidation” bankruptcy, because it involves selling a debtor’s non-exempt assets to pay off creditors.
In 2022, there were 225,455 Chapter 7 bankruptcy filings.
Chapter 11 bankruptcy is a reorganization bankruptcy that allows businesses to restructure their debts and operations under the supervision of a bankruptcy court.
It is also available to individuals with large debts or complex financial situations.
In 2022, there were 4,918 Chapter 11 bankruptcy filings.
Chapter 13 bankruptcy is a bankruptcy repayment plan that allows individuals with regular income to repay their debts over a period of 3-5 years.
In 2022, there were 157,087 Chapter 13 bankruptcy filings.
Although bankruptcy is a federal legal process, the number of bankruptcy filings varies significantly by state.
Here are bankruptcy statistics for some of the most populous states in the U.S.
With more than 39 million residents, California is the most populous state in America. It also has the highest number of bankruptcy filings in the nation.
There were 30,973 bankruptcy cases filed in the state in 2022.
Texas is the second-most populous state in the United States, with more than 29 million residents. In 2022, there were 20,121 bankruptcy filings in Texas.
Florida, the third-most populous state in America, had 25,760 bankruptcy filings in 2022.
In 2022, there were 15,542 bankruptcy filings in New York.
With a population of 22 million, Florida has the highest rate of bankruptcy filings of the most populous states.
It’s actually the states with lower populations, however, that have the highest rates of filing for bankruptcy. The rate of personal bankruptcy filings in Florida in 2021 was about 145 filings per 100,000 residents, which is less than half the rate in Alabama, the state with the most filings per capita.
The top five states for bankruptcy filings per 100,000 people are:
Learn who is filing for bankruptcy and their demographic characteristics.
According to data from the Administrative Office of the U.S. Courts, in 2020, the majority of bankruptcy filers were between the ages of 35 and 54.
However, the number of filings by individuals 65 and older has been increasing in recent years.
In 2020, 49% of bankruptcy filers were female, and 51% were male, according to the American Bankruptcy Institute. This gender split has remained relatively consistent over the past decade.
Data from the American Bankruptcy Institute shows that in 2020, the majority of bankruptcy filers were white.
Here’s a more detailed look at bankruptcy statistics by race:
However, it’s worth noting that these figures may be influenced by the racial demographics of the general population.
The majority of bankruptcy filers are married, according to data from the Administrative Office of the U.S. Courts.
In 2020, 41% of filers were married, while 34% were single, and 24% were divorced or separated.
In 2020, 13% of bankruptcy filers had a college degree, while 28% had completed some college, according to data from the American Bankruptcy Institute.
The majority of filers (45%) had a high school diploma or less.
Data from the American Bankruptcy Institute shows that in 2020, the majority of bankruptcy filers (56%) had an annual income of less than $50,000.
However, the percentage of filers with an income of $100,000 or more has been increasing in recent years.
According to the Administrative Office of the U.S. Courts, the number of bankruptcy filings has been declining in recent years.
In 2022, there were 387,721 total bankruptcy filings, which is a 25% decrease from 2010 when there were 1,536,799 filings.
Bankruptcy filings fall into two main categories: business (corporations, partnerships, and other entities) and non-business ( individuals).
According to U.S. Bankruptcy Courts data, business bankruptcies make up only 5% of all bankruptcy filings.
One reason for this is that businesses have more options for restructuring and liquidation under the U.S. Bankruptcy Code.
Further, while personal bankruptcies can be influenced by job loss and high interest rates, businesses can reduce expenses, restructure debt, and seek new investments.
Bankruptcy filings can be influenced by a variety of factors, including economic conditions, personal finances, and legal regulations.
Economic downturns and recessions can increase the rate of bankruptcy filings. When people lose their jobs, their income decreases, and they may find themselves unable to pay their bills.
In addition, economic downturns can reduce the value of investments and assets, leading to insolvency and bankruptcy.
Personal financial problems such as high levels of debt, medical bills, divorce, and job loss can also contribute to bankruptcy filings.
These factors can reduce income, increase expenses, and make it difficult for people to keep up with their financial obligations.
Changes in bankruptcy laws and regulations can affect the rate of bankruptcy filings.
For example, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 made it more difficult for people to file for Chapter 7 bankruptcy.
This legislation imposed new requirements on credit counseling and financial management education.
High-interest rates, predatory lending, and aggressive debt collection practices can also contribute to bankruptcy filings.
These practices can leave individuals and families with unmanageable debt loads and little recourse for addressing their financial problems.
To determine if bankruptcy is suitable for you, assess your financial situation, including your debts, income, and expenses. If you are unable to pay your bills each month and are falling behind on payments, bankruptcy may be a viable option.
Determine the types of debt bankruptcy can help with, such as credit card debt and medical bills.
Also, evaluate the impact bankruptcy will have on your credit score and your ability to obtain credit or loans in the future.
Consider alternative options, such as debt consolidation or negotiating with your creditors to reduce your debt.
If you are facing mounting debt with no clear way to pay it back, bankruptcy may be the best option for you to financially recover.
That said, bankruptcy isn’t for everyone, and there may be other options available to help you avoid filing.
Your best course of action is to meet with a bankruptcy lawyer to learn whether bankruptcy is the best option for you.
According to the Administrative Office of the U.S. Courts, there were 387,721 bankruptcy filings in the United States in 2022, which is a decrease from the previous year.
However, the exact number of bankruptcy filings varies from year to year.
According to bankruptcies statistics, women are slightly more likely to submit personal bankruptcy filings than men.
This is in part due to factors such as medical expenses, student loans, and narrower paths to financial freedom after divorces.
In January 2023, there were 31,087 bankruptcy filings across all chapters of bankruptcy, representing a significant 19% increase from the same period in 2022 when there were 26,215 filings.
This suggests that more people are experiencing financial difficulties and turning to bankruptcy as a potential solution.
Written by: LawFirm.com
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