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The
firm's compilation of bankruptcy cases showed the Chapter 11
filings used to reorganize larger businesses still jumped 29% in
2020 to 7,128, compared to 5,158 in 2019, a tally that included
major retailers like J.C. Penney driven under by the biggest
economic downturn in a century.
But overall filings, including all personal and other business
bankruptcies, for the year were 529,068, compared to nearly
800,000 annually in recent years, and triple that in 2010 at the
end of the last recession.
The low level of bankruptcies has been one of the more
perplexing dynamics of a pandemic era that has seen millions of
jobs destroyed, record numbers of people collecting unemployment
insurance, and small businesses forced to close to combat the
spread of the coronavirus.
Government unemployment insurance, business loans and other
programs ended up replacing much of that lost income, pushing
savings to record levels and keeping households and businesses
afloat -- at least for now.
A further $900 billion recently approved by Congress may
continue to push a full reckoning down the road.
But Epiq AACER Senior Vice President Chris Kruse said in a press
release he expects household and other non-commercial filings
"to grow substantially in the second half of 2021," as
government programs end and debts from the last few months come
due.
Though many households used government stimulus or increased
unemployment benefits to pay down debts, for example, others are
wracking up obligation by delaying rent and mortgage payments.
(Reporting by Howard Schneider; Editing by Chizu Nomiyama and
Lisa Shumaker)
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