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When it comes to bankruptcies in the U.S., there’s good news and bad news.
The good news is that 2023 was the third-lowest year for bankruptcy filings and 42% below the pre-pandemic levels of 2019. Excluding 2021 and 2022 — where many businesses received pandemic-related assistance — bankruptcies were at the lowest historic levels since 1997.
But the bad news is that they’re on the rise. According to data from the global legal consulting firm Epiq AACER and the Administrative Office of the U.S. Courts, bankruptcy filings in the U.S. increased by about 17 to 18% in 2023 compared to the prior year, with January marking “18 consecutive months that total, individual, and commercial bankruptcy filings have registered monthly year-over-year increases.” And the actual numbers could very well be higher when you consider the unreported number of small business owners who shutter their doors, settle their debts (or not) and walk away from their firms without making any formal filings.
