New bankruptcy filings plummet 38.1 percent

From the United States Courts:

Bankruptcy filings dropped 38.1 percent for the 12-month period ending March 31, 2021, a dramatic fall that coincided with the coronavirus (COVID-19), which first disrupted the economy in March 2020. According to statistics released by the Administrative Office of the U.S. Courts, the March 2021 annual bankruptcy filings totaled 473,349, compared with 764,282 cases in the previous year.

Filings fell both for businesses and non-business bankruptcies, compared with the year ending March 2020. Non-business filings fell by a total of 38.8 percent, while business filings fell 13.9 percent.

When COVID-19 numbers began to spike last year, unemployment initially soared. But several factors may have contributed to the sharp drop in new bankruptcy filings.

New filings fell in all federal courts, including the bankruptcy courts, as many federal courts closed their doors to in-person business. In addition, unemployment began to moderate, and state lockdown orders depressed personal expenditures. Increased government benefits and moratoriums on evictions and certain foreclosures also may have eased financial pressures in many households.

Featured photo by Mikhail Nilov from Pexels

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