Bankruptcy Statistics 2024: Business and Individual Filings
A decade ago, bankruptcy was a remote concept for most Americans, saved for extraordinary crises. Yet, in 2024's challenging economic climate, insolvency threatens ordinary folks worldwide as filings swell into court dockets.
We document the unraveling landscape by shadowing a middle manager whose business buckles under pressure. With personal bankruptcies up 13% and business Chapter 11's rising 30% over last year, these statistics expose systemic cracks. Peering behind the data at underlying forces, from easy post-recession money to the pandemic's lasting financial carnage, this piece chronicles how an exception has become the norm, with neighbors now seeking legal refuge alongside corporate titans.
- Personal debt makes up an alarming 97% of filed bankruptcy cases in America.
- The issue of unattended medical bills is one major reason people face bankruptcy.
- The number of filed bankruptcy cases by the same group of people accounts for 8%.
- Reckless spending is the cause of at least 5% of cases of bankruptcy.
- People earning less than $30,000 annually make up 60% of filed bankrupt cases.
- The records show that men are more likely to file for bankruptcy than women.
- Just 20% of bachelor's degree holders or more filed bankruptcy cases in 2010.
- Corporate bankruptcy in America rose way high in nearly all the quarters of 2020.
- It came as a surprise that 470 companies declared a state of bankruptcy from January 2020 until September.
- 2019 was quite an overwhelming year as over 600 businesses were declared bankrupt by the New York Times.
This section will deal with a lot that has to do with bankruptcy at the personal level. The statistics and numbers here will give you a better understanding of bankruptcy at this level.
1. Personal Debt Makes up as high as 97% of Filed Bankruptcy Cases in America.The records are plain on this, and who files the most bankruptcy cases cannot be doubted. It is alarming that most cases of bankruptcy that make their way to the law courts are personal. These cases cover student loans, car loans, credit cards, and mortgages. Cases of personal bankruptcy filed in 2019 alone all summed up to 752,160. Personal debt took a large chunk of these cases by 97%. The remaining cases, which totaled 22,780, came from the corporate world and were just 3% of filed cases. Most persons who filed for bankruptcy were not rich, nor did they have some secure investment to fall back on in their low moments.
2. Unattended Medical Bills are One Major Reason Many People Face Bankruptcy.Medical expenses stand as one of the main reasons people fall into debt. In the case where a person loses their job, then health issues will cause a strain on the finances. Nerd Wallet says that many Americans struggle to pay their medical bills. It says this will make 1.7 million Americans move to the law courts for bankruptcy protection. One in every five persons in a survey had been called out to pay their debts by collagen agencies. This is quite alarming, as one can only imagine how people go to the lengths of declaring a state of bankruptcy to pay off their medical bills.
3. The Number of Filed Cases of Bankruptcy by the Same Group of People Accounts for 8%.Statistics show that 8% of persons who have stepped out to file bankruptcy have done so before. Surprisingly, 16% of all cases filed are from those who once had a bankruptcy. Most experts see these repeated bankruptcy filings as an exploitation of the law. Little progress has been made so far in preventing the abuse of bankruptcy. This stems from the fact that it is hard to state when or why a person should declare bankruptcy. 8% of people who fall back on bankruptcy see it as the best way to clear their debts and start afresh.
4. Reckless Spending is the Cause of Not Less Than 5% of Cases of Bankruptcy.Cases of bankruptcy from reckless spending are surprisingly low at just 5%. A lot of cases of bankruptcy caused by spending come from financial hardships. This is mainly from low-income earners who sometimes face issues of health or even the loss of a job. This case makes the person run into debt and cripples the finance to a state of bankruptcy. In such instances, declaring a state of bankruptcy will help a great deal to ease the burden.
5. People Earning Less Than $30,000 Annually Make up 60% of Filed Bankrupt Cases.An analysis made in 2011 showed that the number of bankruptcies that were filed fell from what it was four years before. This was a record success as it was at 66% four years ago. At the same time, there was an increase in the number of bankruptcies filed by persons who earned over $60,000 yearly. This was indeed a rise from where it stood at 5.5% to 9.2%. These events at the time showed that no one can be immune to financial troubles.
6. The Records Show That Men Are More Likely to File for Bankruptcy Than Women.The numbers of men and women who filed for bankruptcy are almost the same percentage. Men stood at 52%, while women were a little lower at 48%. Married couples within the same period made up 64% of private bankruptcies. The records also include those filed by those who jointly pay their taxes. Those who are widowed made up 3% of cases, single persons stood at 17%, and those who were divorced took up 15%.
7. A Mere 20% of Bachelor's Degree Holders or More Filed Cases of Bankruptcy in 2010.A study done in 2011 showed that people with a good education level fall more into bankruptcy. This is not far from the truth, as many graduates struggle to repay student loans. Nearly 36% of submitted bankruptcy cases came from those with just a high school certificate. Those with a college degree held 29% of the cases filed over time.
American Corporate Bankruptcy Statistics
The bankruptcy rate in the corporate world was a cause of concern for many experts in 2020. As high as 33% was filed from corporations in the first quarter of 2020. The average over the entire period stood at 18%. Large cases of bankruptcy in the same quarter stood at 6% as private companies had 25% filed cases. In the third quarter of the same year, 49% of organizations filed bankruptcy cases. Mega bankruptcy over the third quarter jumped to 15%. Public filings during this time stood at 26%, while cases filed by private companies made up 23%.
9. It was a Shock to Many, as 470 Companies Declared a State of Bankruptcy from January 2020 Until September.This was indeed very surprising as this had never happened after 2010. When the 2020 curtain was drawn to a close, 500 companies emerged bankrupt. This was disheartening as 30 more companies were added to the already high number. Over the period, Advanzeon Solutions, alongside KB Holdings, Providence Hospital, and several others, filed a bankruptcy case of Chapter 11. These companies and many others, totaling 500, declared bankruptcy.
10. 2019 was Quite an Overwhelming Year as Over 600 Businesses Were Declared Bankrupt by the New York Times.One year that will continue to ring in the corporate world of Americans is 2019. It was a heavy year, with 636 bankruptcy cases from New York. California was not left out; it came second place with 577 bankruptcy cases. Right after, it was the city of Texas with 530 filed cases. Following closely was Illinois, with 486 filed cases, and in fifth place was Pennsylvania, with 483 bankruptcies.
2023 Bankruptcy Statistics
The number of bankruptcy filings from both the personal and corporate worlds rose 10% over 12 months. The number of cases has risen as high as 418,724. This is quite alarming, considering the 380,634 filed cases in 2022. Business bankruptcy filings rose from 12,748 to a high of 15,724 on the last day of June 2023. Personal bankruptcy at the same period stood out at 403,000, a rise from its earlier 367,886 in 2022.
12. Personal Filings Fell to a Downhill of 23.6% Bankruptcy at the Close of 2021.Personal bankruptcy achieved quite a feat when it fell from a height of 522,808 to a low of 399,269 at the close of 2021. This brought hope as many saw it as reviving economic health. The courts were left idle as they had fewer cases to deal with in the year. Many tied the sharp rise to the bonus given out freely to persons without jobs during the pandemic.
13. Alaska had the Least Number of Filed Cases for Bankruptcy in 2021.In 2021, there were only 107 filed bankruptcy cases in just Alaska. California had a record high of 18,817 during the same period. Other states like Montana, South Dakota, New Hampshire, North Dakota, and Maine were able to keep it under 300 filed cases all through 2021. Other states followed in the steps of California with more than 6,000 files of bankruptcy, including Florida, Ohio, Indiana, New York, Alabama, and a few others.
14. The United States had 413,616 Filed Cases in a Single Year.The year 2021 saw a drop in the number of filed bankruptcy cases. It fell from the level of 544,463 in 2020 to end in 413,616 cases. This was, however, a fall of 24% from what it was at the end of 2020. Bankruptcy can be said to be falling ever since the pandemic crisis of 2019 and 2020. Business filings were not left out, as they fell by 33.7%. It stood at 21,655 in 2020, losing to 14,347 at the close of 2021. One can only hope that this drop in bankruptcy will continue in the long haul.
15. The Number of Corporate Fillings Took a Hike in 2022 by 32%.Government relief programs greatly helped wade off bankruptcy issues from 2020 to 2022. This cutoff created a gap in American businesses in 2022. There was a hike in the number of filed bankruptcy cases in the first two parts of 2022. Corporate bankruptcy went all high to 250 at the end of April 2022. This scenario will likely keep on as the economy goes downhill.
16. The Debt Rate Increased to 15% in 2022.Experts forecasted that 2022 will most likely see a hike in the rate of bankruptcy by 15%. To counter this, some measures were implemented by the United States.
ConclusionThe issue of bankruptcy is tackled yearly, not just in the United States but worldwide. Taking a cue from the United States, we can see that the government plays a major role in fighting bankruptcy. The belief that filing for bankruptcy is the last option for anyone is not far from the truth. Anyone who can clear their debt is way above getting bankrupt. But it would be wrong not to remember that uncertainties such as accidents or even ill health can drive one to the state of bankruptcy. Given all these, one can only ask this penitent question: can I pay my debt within 5 years? If not., then filing for bankruptcy will not be a bad idea.
Frequently Asked QuestionsCan just anyone file for bankruptcy?Anyone, be it an individual or a business, can run into debt and file for bankruptcy. This does not rule out laws that guide how much you are qualified to receive.
How can bankruptcy be defined?This is a case in which a person has run out of money options. Due to illness, accident, or even the loss of a job, the individual runs into a great deal of debt. Going to the law court allows a person to have the debts either erased or left unattended.
What are the various types of bankruptcy?Some of the popular bankruptcies in the United States are Chapters 7, 13, and 11. Chapter 7 covers any business or persons with few assets and little earnings. The next chapter is chapter 13, which helps you repay part of your debt to have it erased. Last but not in any way the least is Chapter 11, which allows a business to reform its assets to pay up creditors.
Sources