Bankruptcy filings fall in 2020 for most people in the U.S.
Each year, the government releases information on the total number of bankruptcies that have taken place. In January 2021, the United States Courts reported that there was a 29.7% decrease in the number of bankruptcy filings from 2019 to 2020, which may have been largely related to stimulus support and other changes in the economy during that timeframe.
In 2020, the total number of annual bankruptcies filed was 544,463. This was compared to 774,940 bankruptcies in 2019. The U.S. Courts stated that business bankruptcies and non-business bankruptcies fell overall. However, there was an increase in filings in one category, Chapter 11 reorganizations.
Chapter 11 cases rose largely due to business reorganizations
In 2019, there were 7,020 Chapter 11 business reorganizations compared to 8,333 in 2020. Of those, the majority, 7,786, were directly linked to business reorganizations.
Despite negative economic conditions, bankruptcies fell
One thing many will notice is that bankruptcies fell despite major changes in the U.S. economy and job availability. The unemployment rate had surged during the same time period. With stimulus support, as well as other steps taken to minimize the impact on the American people, at least some bankruptcies may have been avoided. It is important to note, however, that bankruptcy filings tend to lag behind even when economic factors could make them more common.
If you’re struggling with your finances, bankruptcy is still an option. It may be beneficial to look into bankruptcy as a way to minimize your liability and to help you get your finances back on track in 2022 and well into the future.