Despite the economic uncertainty brought by the pandemic this year, paradoxically, the number of bankruptcy filings in the country hit a new 14-year record low this November. According to data released by the legal giant, Epiq, new bankruptcy filings across all chapters for the month was 34,440, the lowest since January 2006.
According to Deirdre O’Conner, Epiq’s managing director of corporate restructuring, the economic uncertainty itself is to blame for the unusually low filing count.
“These historic low bankruptcy filings reflect the overall uncertainty about our economic recovery. Bankruptcy is a legal tool to restructure, but in this unknown financial environment, the benefit from seeking bankruptcy protection is unclear for individuals, families, and even large companies,” – Deirdre O’Conner.
In addition, government intervention may have also partly contributed to the fall in bankruptcy filings. The various COVID-19 related government programs and state eviction moratoriums are lessening individual incentives for filing for bankruptcy.
Individual bankruptcy filings through the year as a whole have been low. Compared to 2019 for the same period, in 2020, non-commercial filings under Chapter 7 were down 21%, from 414,625 to 325,716, and in the case of non-commercial filings under Chapter 13, the tally was down by 45%, from 252,660 to 137,764.
Source: Globe Newswire
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