Total bankruptcies for all chapters in August 2021 stood at 303, 13 more than in July. When compared with August 2020, this year is -28% less. The accumulated total in 2021 is 2,639 bankruptcies, 24% less than for the same period in 2020.
Chapter 7 bankruptcies in August were 129, the first increase month over month in 11 months with ten more than in June. When compared to August 2020, Chapter 7 bankruptcies are 40% less. The accumulated total from January to August, there are 1,098 Chapter 7 bankruptcies, 29% or 447 less than for the same period in 2020. Chapter 7 is available to debtors with low income or below the corresponding “median income” or who succeed in passing what is known as a means test. Commonly the person has few or enough assets for basic needs (clothing, furniture, etc.).
Chapter 11 bankruptcies in August are 3, 2 less than in July 2021. The accumulated total in 2021, is a total of 32 bankruptcies or 40% less than in 2020. Chapter 11 of the Federal Bankruptcy Code is primarily for businesses (small and large) such as Corporations and Partnerships. It can also be used by individuals with high amounts of debt and assets who don’t qualify under Chapter 13 Bankruptcy.
Chapter 12 bankruptcies in 2021 are 5, including the one in August. The accumulated total for the same period in 2021 there were 2. Chapter 12 bankruptcy plan allows a family member of a farmer to pay his creditors through a repayment plan. Although the program is designed to pay all creditors their debt within three years, the plan can be extended for up to five years if approved by the bankruptcy court.
Chapter 13 bankruptcies in August is 170, 3% more than in July and 15% less than in August 2020. The year-to-date total from January to August are 1,504, 21% less than for the same period in 2020. Generally, Chapter 13 is available to debtors with unsecured debt of less than $ 360,475; and whose insured debts do not exceed $ 1,081,400. Final eligibility is determined on a case-by-case basis based on many factors and legal requirements.
Business type bankruptcies reflect four less than in 2020 from January to August. The accumulated total in 2021 is 143 or 3% less than in 2020. ‘Other sectors’ have the most quantity of bankruptcies with 17. Twelve restaurants have gone bankrupt, followed by seven lawyer firms. Agricultural and construction industries have five each one and coffee shops have 4. Year-to-date top bankruptcy by amount corresponds to the “Car Rental” industry with $19.6 million, followed by Retail Advertising with $11 million.