Bankruptcy Statistics 2024: Personal & Corporate Filings

This comprehensive guide examines the latest data and trends in personal and corporate bankruptcy filings. With insightful analysis and commentary, it provides perspective on this complex financial process.

Introduction

Bankruptcy provides legal protection and financial relief for individuals and businesses unable to pay their debts. However, filing is not without costs—it damages credit and limits future access to loans and financing.

Understanding current statistics and projections can shed light on who is filing bankruptcy and why. This article will analyze the most recent data on bankruptcy filings and trends.

We’ll examine personal and corporate bankruptcy statistics in detail, looking at factors like debt size, demographics, causes, and industry breakdowns. You’ll also find expert analysis on economic influences and what leading indicators suggest for future filing rates.

Whether you’re researching bankruptcy data for academic, professional, or personal reasons, this guide aims to deliver clarity and perspective. Let’s dive in.

Key Personal Bankruptcy Statistics and Trends

Personal bankruptcy filings make up around 97% of all new bankruptcies in the U.S. While rates fluctuate based on economic conditions, some clear demographic trends emerge.

• 631,040 total personal bankruptcy filings over the 12-month period ending September 2022, down 21% year-over-year. (Source)
• 62% of personal bankruptcies are Chapter 7 liquidation filings. The remaining 38% are Chapter 13 reorganization filings. (Source)
• 66.7% of personal bankruptcy filers in 2021 made less than $50,000 per year. 13.5% made between $50,000-99,000. (Source)
• The average personal bankruptcy filing had $89,165 in total debt. (Source)
• 1.2% of filers had debt exceeding $1 million. (Source)

Demographic Factors

• 60% of personal bankruptcy filers in 2021 were male. 40% were female. (Source)
• 92% of filers in 2021 were married or single adults, with just 8% widowed/divorced. (Source)
• Age of filers:
  • 18 to 24 years old: 1.9%
  • 25 to 34 years old: 9.6%
  • 35 to 44 years old: 19.9%
  • 45 to 54 years old: 25.3%
  • 55 to 64 years old: 22.8%
  • 65 or more years old: 15.8% (Source)
• Education level of filers:
  • No high school diploma: 7.1%
  • High school graduate: 33.6%
  • Some college: 31.5%
  • College graduate or more: 27.9% (Source)

Top Causes

• Medical bills are the #1 cause of personal bankruptcy, cited in over half of filings. (Source)
• Job loss accounted for 27% of bankruptcy filings from 2015 to 2019. (Source)
• High credit card balances play a role in up to 46% of filings. (Source)

Historical Filing Trends

• Total personal bankruptcy filings peaked during the Great Recession:
  • 2005: Over 2 million filings
  • 2010: Over 1.5 million filings (Source)

-Filings declined steadily from 2011-2019 as the economy recovered. However, the COVID-19 pandemic triggered historic stimulus measures and lender flexibility that suppressed bankruptcies despite economic turmoil. Rates are now rising again as those programs expire.

• Long-term personal bankruptcy filing trends:
  • 1985: 340,340 filings
  • 1995: 926,601 filings
  • 2005: 2,039,214 filings
  • 2015: 819,240 filings
  • 2021: 414,569 filings (Source)

Corporate Bankruptcy Statistics and Analysis

While personal bankruptcies dominate overall filings, major corporate bankruptcy filings often have an outsized economic impact. What do the latest statistics show?

• 22,993 total business bankruptcy filings over the 12-month period ending September 2022, down 21% year-over-year. (Source)
• 64% of business bankruptcies are Chapter 7 liquidation filings. (Source)
• 14% of business bankruptcies are Chapter 11 reorganization filings. (Source)

Recent Major Corporate Bankruptcies

Several large corporate bankruptcies made headlines in 2022:

• Blockbuster – The beleaguered video rental chain filed again for Chapter 11 in September 2022. (Source)
• Revlon – The cosmetics giant filed for Chapter 11 bankruptcy protection in June 2022. (Source)
• Celsius Network – The cryptocurrency lending platform filed for bankruptcy in July 2022 amid crypto market turmoil. (Source)
• Bed Bath & Beyond – The struggling retail chain announced plans to close 150 stores and cut jobs after filing for Chapter 11 in January 2024. (Source)

Sector Trends

Some industry sectors are more vulnerable to bankruptcy than others. In 2022, the sectors with the most Chapter 11 filings included:

• Oil and Gas – Surging prices early in 2022 could not undo the pandemic‘s crushing blow. 42 companies filed as of December. (Source)
• Healthcare – 29 companies filed as expenses rose and elective procedures lagged projections. (Source)
• Retail – At least 25 major retailers including Revlon, Blockbuster, and Bed Bath & Beyond filed in 2022. Ongoing digital disruption continues to pressure traditional retail. (Source)

Bankruptcy Rate Projections and Analysis

Both personal and corporate bankruptcy filings are expected to rise significantly in 2024 according to legal and finance experts. Here are the key reasons why.

Projected Increase in Personal Bankruptcies

Personal bankruptcies will likely increase by 10-15% in 2024 according to projections by Moody‘s Analytics and the National Association of Consumer Bankruptcy Attorneys. Main factors include:

• Credit card debt rebounding – Balances grew by 15% in 2022 as stimulus funds dried up. (Source)
• Savings depleted – Many households drained emergency and retirement savings during the pandemic. (Source)
• Mortgage rates rising – Higher interest rates make homeownership less affordable, leading to potential distress. (Source)

Projected Increase in Corporate Bankruptcies

Experts predict corporate bankruptcies could rise 20% or more in 2024 as economic growth slows. Key factors increasing business vulnerability:

• Inflation/input costs – Price increases have outpaced revenue growth for many companies.(Source)
• Supply chain turmoil – Ongoing disruptions continue to constrain operations and boost costs. (Source)
• Debt overload – Businesses of all sizes are carrying unsustainably high debt from the pandemic. (Source)
• Tightening credit – Rising interest rates lower lending and increase refinancing costs. (Source)

Conclusion

Bankruptcy filings are resurging after a period of pandemic-induced declines. However, filing for protection remains a useful financial tool for those genuinely in distress.

Understanding the latest statistics and analysis provides perspective on bankruptcy filing demographics, causes, and trends. It also informs reasonable projections given economic conditions.

For individuals, key risk factors to watch include income instability, uninsured medical expenses, and unmanaged debt. Businesses must control costs, adapt to change, and maintain responsible capital structures to stay resilient.

While often stigmatized, bankruptcy offers critical relief and a chance to regain one‘s financial footing after periods of unavoidable hardship. The data indicates many filers emerge stronger. Still, it pays to always seek qualified legal counsel when weighing the decision to file.

I hope this detailed examination of bankruptcy statistics provides context and clarity around this complex financial process. Let me know if you have any other questions!