Bankruptcy filings of all types rose 10% from a year ago to 35,355, according to the new to research of Epiq’s bankruptcy analysis platform.
Business deposits rose 6% to 1,753 in August, while individual deposits jumped 10% to 33,494, Epiq said.
Month-over-month, total bankruptcy filings increased even more, up 15% from July, representing a 16% increase in commercial filings and a 15% increase in filings individual.
For the first time, all chapters increased from July. Chapter 11, which allows companies to restructure debt, filings jumped 81% to 466 from 257 in July. Chapter 13 filings, which allow individuals to develop a plan to repay all or part of their debt, rose 15% to 14,981 filings. Chapter 7 filings, which provide for the liquidation of the debtor’s non-exempt assets to distribute the proceeds to creditors, rose 13% in August to 19,884 filings.
“The new bankruptcy filings in August clearly show market momentum,” said Chris Kruse, senior vice president at Epiq Bankruptcy. “New Chapter 13 filings continue the recent trend of month-over-month growth and for the first time since March, we are also seeing an increase in new Chapter 7 filings in August. We expect this trend continues as the United States emerges from the summer and marches into the fourth quarter.”
Amy Quackenboss, executive director of the American Bankruptcy Institute, said the increase comes as some households and businesses experience mounting debt as interest rates rise and they face inflation. “Although still at historic lows, August’s increase in bankruptcy filings indicates that more families and businesses are looking for an avenue to ease growing financial hardship,” she said.
Endo International (OTCPK:ENDPQ) was one of the companies that filed for Chapter 11 bankruptcy in August as the specialty pharmaceutical company was saddled with more than $8 billion in debt as it dealt with ongoing litigation related to to its alleged role in the opioid crisis. .
Additionally, NewAge (NBEV), a company that sells energy drinks, nutritional supplements and personal care products, filed for Chapter 11 on Aug. 30 and was granted a $16 million debtor-in-possession financing facility. dollars and received a stalking horse offer.