The News is Ominous, But Not Unexpected
Since the onset of the pandemic, bankruptcy filings have been suppressed, in large part by the COVID Relief funds distributed by governments around the world. Now, according to a September 1, 2022, press release from Epiq Bankruptcy, US bankruptcy filings across all chapters registered month-over-month increased in August.
Specifically, bankruptcy filings rose in August 2022 by 10 percent over the August 2021 total. At the same time, commercial filings increased 6 percent in August 2022, compared to August 2021. Most notably, Chapter 11 filings increased 81 percent, totaling 466 filings in August 2022 compared to 257 registered in July. Small business filings, and subchapter V elections within Chapter 11, increased by 41 percent as well.
“New bankruptcy filings in August clearly show momentum in the market,” said Chris Kruse, senior vice president at Epiq Bankruptcy, we also see increases in new Chapter 7 filings in August. We expect this trend to continue as the U.S. exits the summer and marches toward the fourth quarter.”
“Financially distressed households and companies are experiencing expanding debt loads amid rising interest rates, inflation, and supply chain concerns,” said ABI Executive Director Amy Quackenboss. “Though still at historically low numbers, the increase in bankruptcy filings in August points to more families and businesses looking for a path to alleviate mounting financial challenges.”
Seven Bankruptcy Resources
In light of the above news, credit professionals should be prepared to encounter a rising number of bankruptcy filings. In the past, the tendency has been for consumer bankruptcies to bump up first, followed by commercial filings. So far, the pandemic has seemingly broken all the rules, and with inflation mounting along with expectations for a post-Covid recession -- if not already started -- it is anybody's guess if the past will again be prologue. Whether bankruptcy filings peak sooner or later, and whether this is the start of a wave or a tsunami, nobody knows.
To help you manage through these difficult times, Credit Today has compiled a list of Bankruptcy Resources. We trust these will help you with monitoring individual bankruptcies, tracking filing deadlines, trend watching, legal insights, and more.
1. ABI: The American Bankruptcy Institute is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with an unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists, and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events
2. Bankruptcy Law360: This is a daily newsletter that lists major new bankruptcy filings, news about chapters 7 and 11, and expert analysis of bankruptcy issues. Access to the articles requires a paid subscription, but there is no charge to get the newsletter, which contains a headline and short summary that in most cases provides enough information for a successful Internet search. You can check it out at https://www.law360.com/bankruptcy
3. BankruptcyWatch: This is a PACER (see below) replacement that's comprehensive, organized, and easier to use. Its products combine machine learning and custom PDF mining to streamline PACER tasks. Here's the website https://www.bankruptcywatch.com
4. BK Data: This site was built expressly for bankruptcy attorneys, but with access requiring a modest monthly fee, may be useful to commercial creditors that incur a large number of bankruptcies as well. It provides debtor demographics and case details, a Court Calendar, unlimited filed and discharged reports, and more. The website is at https://bkdata.com
5. CB Insights: Their stated mission is to “enable every organization to make smarter decisions about tech.” As such, they provide insights across a wide spectrum of industries. This past July, they published a list of 139 bankruptcies in the retail sector that discusses why they failed. You can access it at https://www.cbinsights.com/research/retail-apocalypse-timeline-infographic
6. Epiq Bankruptcy: They advertise themselves as the most complete, accurate, and timely bankruptcy dataset. Built with advanced technology and industry-leading data built around 36 million cases, they offer products and services that help you ensure accuracy, protect reputation, maximize recovery, gain insight, enable scale, and improve case outcomes. You can find their website at https://bankruptcy.epiqglobal.com
7. New Generation Research: NGR is a provider of corporate bankruptcy and distressed securities publication, products, and services that include:
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- BankruptcyData: This research platform is built around an extensive database of business bankruptcy information. It streams dockets from the U.S. Bankruptcy Court and adds commentary when the bankrupt company has public equity or debt, a high profile, or liabilities in excess of $50MM. In addition, they publish year-end reviews of corporate statistics and court information - the 2020 Review is available at no charge. This service also provides complementary U.S. Court and Bankruptcy Trustee Directories, a history of bankruptcy, and a glossary of bankruptcy terms. Save money on PACER fees.
- Bankrupt Company News: This WordPress Blog provides registered users with research and reporting from BankruptcyData.
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8. PACER: This is the US Judiciary's public access portal (Public Access to Court Electronic Records) and is the source of much of the public record information contained in the commercial databases on this list. It contains records for US bankruptcy, and District and Appellate Courts. Searches can be narrowed down by the court, case number, case title, case type, region, and status. It can be accessed at: https://pacer.uscourts.gov
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