Bankruptcy Statistics COVID
The coronavirus (COVID) has caused massive shifts in consumer bankruptcies in 2020 compared to 2019.
The purpose of the bankruptcy statistics and analysis is to provide a statistical analysis of the bankruptcy market due to COVID-19, using US Courts Bankruptcy Caseload Data, AACER bankruptcy data, and internal Ascend bankruptcy data.
Executive Summary
The % change of US consumer bankruptcy filings for Chapter 7 and Chapter 13 bankruptcies began to decline in March 2020, and has continued to downward trend through July, 2020.
- The cumulative Chapter 7 and Chapter 13 cases filed have decreased by 24.7% when comparing January - July 31, 2019, to January - July 31, 2020.
- The greatest change has been seen in Chapter 13 bankruptcies. Chapter 13 bankruptcy has decreased 37.9% YOY and Chapter 7 bankruptcy filings have decreased by 17.7% YOY ending July 31, 2020.
- The % change in bankruptcy filings month over month was negative across all states but one in April.
- Ascend has seen a 531% increase in consumer's adding unemployment income in its Chapter 7 means test calculator and Chapter 13 repayment plan calculator.
- 7.2% of Ascend's bankruptcy calculator takers state COVID is the reason for bankruptcy. The number is increasing.
- 79.4% of people stated that reduced income was due to the COVID bankruptcy filing interest.
United States Bankruptcy Filing Statistics
Below is the data compiled for the United States to show the % change and # change in Chapter 7 bankruptcy and Chapter 13 bankruptcy filings. The data is comparing January 1, 2019 - July 31, 2020 to January 1, 2020 - July 31, 2020. Source: ABI AACER Bankruptcy Data.
COVID-19 US Bankruptcy Filings Cumulative Change %
COVID-19 US Bankruptcy Filings Cumulative Change #
Chapter 7 Bankruptcy Filing Changes Due To COVID %
Chapter 13 Bankruptcy Filing Changes Due To COVID %
Ascend COVID Bankruptcy Data
The data below was cumulated and studied from Ascend's anonymous bankruptcy calculator. The purpose of the calculator is to provide Chapter 7 qualification estimates and Chapter 13 repayment plan estimates where a user will provide information. The data spans from June, 2018 to August, 2020. Source: Ascend's bankruptcy data.
% Of Individuals Choosing COVID-19 as Reason For Contemplating Bankruptcy
Understanding Why Individuals Are Considering Bankruptcy Due to COVID-19
State Bankruptcy Filing Data Trends From COVID
Below is the data compiled for California to show the % change in Chapter 7 bankruptcy and Chapter 13 bankruptcy filings. The data is comparing January 1, 2019 - July 31, 2020 to January 1, 2020 - July 31, 2020. Source: ABI AACER Bankruptcy Data.
COVID-19 California Bankruptcy Filings Cumulative Change %
California Chapter 7 Bankruptcy Filing Changes Due To COVID %
California Chapter 13 Bankruptcy Filing Changes Due To COVID %
CONCLUSION
The bankruptcy statistics show that there has been a large shift in bankruptcy filings due to COVID. The primary reason is still unknown, but the hypothesis from many bankruptcy attorneys we worked with to provide this data is the following:
- Increased supply of unemployment and monetary stimulus in the economy.
- Increased consumer protection protecting against evictions, foreclosures, lawsuits, etc.
Many bankruptcy attorneys believe that there will be a period of increased bankruptcy filings in the coming months once the stimulus money decreases and the consumer protections starts to diminish.
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