Total Bankruptcy filings in October were 334, the third consecutive month with an increase month-over-month. Compared to September there were 16 additional filings, or 5% more. When compared to October 2020 is 20.3% or 125 less filings.
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.). In October, Chapter 7 bankruptcy filings stood at 128. They decreased by 31.9% or 60 when compared to October 2020. The total accumulated chapter 7 bankruptcy filings from January to October are 1,345, -590 or 30.5% less than 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. In October there were 204 Chapter 13 bankruptcy filings. These represent a reduction of 10.5% or 24 bankruptcy filings fewer than in September 2020. Year to date Chapter 13 bankruptcy filings stand at 1,904, 19.9% fewer than in the same period for 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. In October there were a total of 2 Chapter 11 bankruptcy filings, one more than in September 2020. The total year to date Chapter 11 bankruptcy filings is 37, 42% higher than in the same period in 2020.
A resurgence in positive covid-19 cases has had public policy implications causing stricter restrictions for commercial establishments to operate hence delaying the recovery process. Federal spending also decreased with the end of the Paycheck Protection Program (PPP) which provided forgivable loans to help small businesses and nonprofit organizations impacted by the pandemic cover payroll and other expenses. Other direct transfers to indivudiuals as part of the pandemic recovery economic help has ceased, therefore personal consumption will be reduced. We are begining to see the economic impact of the absence of these funds.