New bankruptcy filings in February 2023 registered double-digit increases year-over-year across all U.S. major filing categories, according to data provided by Epiq Bankruptcy. The 31,889 total new bankruptcy filings in February were up 18 percent from the 27,006 filings registered in February 2022. Total commercial filings also increased 18 percent, to 1,696 versus 1,442. Commercial chapter 11 filings increased 83 percent to 373 filings, up from 204. Subchapter V small business elections increased 45 percent to 120 versus the 83 filings registered the previous year.

Continuing year-over-year, total individual filings increased 18 percent to 30,193 versus 25,564 in February 2022. While still below pre-pandemic levels, individual chapter 7 filings increased 12 percent to 16,991 versus 15,190, and individual chapter 13 filings increased 28 percent to 13,149 versus 10,311 the previous year.

Comparing month-over-month, and considering there are three fewer days in February, the 31,889 total filings were still 2 percent higher than the 31,161 total filings in January. Conversely, total commercial filings decreased 1 percent to 1,696 from 1,713 the month prior. Total chapter 11 filings remained flat — 373 versus 376 — and subchapter V elections increased 5 percent to 120 from 114. Total individual filings increased 3 percent to 30,193 from 29,448, and individual chapter 7 filings increased 8 percent to 16,991 from 15,717, while individual chapter 13 filings decreased 4 percent to 13,149 from the 13,678 filed in January.

“The growing number of households and businesses filing for bankruptcy reflects the mounting economic challenges they now face,” said ABI Executive Director Amy Quackenboss. “Debt loads are expanding as the prices of goods and services have gone up with inflation and the cost of borrowing continues to rise. While pandemic relief efforts have largely expired, the safe haven of bankruptcy is continually available for financially distressed businesses and consumers.”

Comparing open to closed cases, while new filings are on the rise, the current 662,204 total open cases represent another month-over-month decline. There are 36 percent fewer open cases since May 2019, when there were more than 1 million. Looking back one year, there are 52,662 fewer open cases than the 714,866 cases open in February 2022, a 7 percent decline.

“Overall, the stimuluses have had a positive effect for individuals and companies, as 10,843 more cases have closed than opened in 2023,” said Gregg Morin, Vice President of Business Development and Revenue for Epiq Bankruptcy. “However, as new monthly filings rise, this trend is likely to end.”