Reports by Epiq Bankruptcy and the American Bankruptcy Institute have revealed that Chapter 11 bankruptcy filings have increased dramatically over the course of this year.
According to Retail Dive, Epiq Bankruptcy released a report showing that Chapter 11 Bankruptcy filings rose by 61 percent during the first three quarters of 2023. In addition to general bankruptcy filing, Epiq and the American Bankruptcy Institute also reported that bankruptcy filings among small businesses increased by 41 percent, while commercial filings of all types of bankruptcy increased by 17 percent.
What’s more, nearly a dozen high-profile retailers, such as Rite Aid and Petco, are at risk of declaring bankruptcy this year, Retail Dive reports.
These revelations reflect trends observed earlier this year. In July, Reuters reported that both Epiq and the American Bankruptcy Institute had observed increases in bankruptcy filings during the first half of the year. The American Bankruptcy Institute, in particular, concluded that the trend was “reflective of more families and businesses facing surging debt loads due to rising interest rates, inflation, and increased borrowing costs.”
Other economic trends have exacerbated the problems associated with these increases in bankruptcy. Amid recession concerns, retail employers engaged in mass layoffs in January, eliminating 13,000 jobs while U.S. employers at large reduced staff by a total of 102,943 people, a 440% increase from the previous January. Collective consumer credit card debt has also risen to a total of over $1 trillion. Worse still, at present, 61 percent of American consumers are living paycheck to paycheck, including 29 percent of Generation Z Americans.
Even so, President Joe Biden has touted the beneficial effects of his Bidenomics. But, if the results are anything to go by, the U.S. may be on the precipice of a Biden-pression, instead of economic prosperity.
The business and economic reporting of CNSNews.com is funded in part with a gift made in memory of Dr. Keith C. Wold.