Personal bankruptcies decline as commercial filings soar
Florida residents may not be surprised to learn that bankruptcy filings have been falling in recent years after surging in the wake of the 2008 financial crisis. Figures for the first quarter of 2016 from the American Bankruptcy Institute show a 5 percent drop in bankruptcy filings compared to the same period in 2015, but a 6 percent drop in consumer filings conceals a possibly alarming increase in the number of commercial bankruptcies.
The data behind the ABI report was furnished by Epiq Systems Inc., and it shows that first quarter commercial bankruptcy filings shot up from 7,438 in 2015 to 9,208 in 2016. This represents an increase of almost 25 percent. Commercial Chapter 11 filings increased by 9 percent. Analysts say that the increase is largely due to volatility in the energy and retail sectors.
While some observers welcome the latest figures and say that they reflect an economy that continues to show robust growth, others point out that the decline in bankruptcy filings observed over the last two years is beginning to show signs of tapering off. They may also be concerned that bankruptcy filings surged from 64,686 in February to over 78,000 in March. The states with the highest number of bankruptcy filings during the first quarter of 2016 were Tennessee, Alabama, Georgia, Illinois and Mississippi.
The financial issues that many American families are struggling to cope with have been the subject of contentious debate in the nation’s capital. While discussions over tax reform and increases to the minimum wage continue, debt relief options such as Chapter 7 or Chapter 13 bankruptcy filings remain a common way to escape unmanageable debt. Attorneys could explain the way that filing for personal bankruptcy differs from other forms of debt relief, and they may also point out that a filing puts at least a temporary end to harassment from creditors and debt collectors.