Chapter 11 Bankruptcies Soar: 72% Increase

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

There has been a substantial rise in Chapter 11 bankruptcy filings. Chapter 11 is generally associated with businesses but also applies to individuals who do not qualify for Chapter 13 bankruptcy because their assets and debts surpass the maximum allowable thresholds.

With Chapter 11 bankruptcies, we are seeing the business landscape changing as customers rely more on online businesses than the typical brick-and-mortar location. This change in consumer behavior is in part related to the COVID-19 pandemic, where consumers changed their shopping habits.

Whether it’s a large corporation or a small business, the change of consumers focusing more on online services will require adapting. Even with Chapter 11, there has also been a rise in Chapter 7 bankruptcy filings. The difference between both chapters is that in Chapter 7, the business is closing, while in Chapter 11, it remains open. However, personal Chapter 7 bankruptcy filings have also increased.

Key Points Discussed in the YouTube video:

• Business bankruptcies, particularly Chapter 11 filings, have surged significantly.
• Consumer bankruptcies, Chapter 7 and Chapter 13, also continue to rise.

Bankruptcy Filings Increase:

This video focuses on the rise of business bankruptcies with Chapter 11 filings, a 72 percent increase. For consumers, personal bankruptcies have increased by more than 16 percent, based on figures from the Federal Reserve of New York.

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Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

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Updated initially on January 30, 2025.