While consumer bankruptcy figures get the most news coverage, from a percentage perspective, they don't hold a candle to the meteoric increase that struck business filings between 2005 and 2009.
For example, a total of 1,402,816 bankruptcy petitions were filed in the federal courts in 2009. Of those, 1,344,095 were filings that involved predominantly non-business debts, or consumer filings. This marked a notable 34% increase over the same figure in 2008.
However, flash back to fiscal year 2005, the last full year before the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) took effect. In that year, a record 1,782,643 bankruptcy petitions were filed, nearly all of which (1,748,421) were consumer filings. Indeed, monthly consumer filings have been steadily increasing ever since 2005 and eagerly recovering to pre-BAPCPA numbers, but for all the doom and gloom surrounding consumer bankruptcies in the recession, filings still remained 23% below 2005 levels in fiscal year 2009.
On the other hand, business filings in fiscal year 2009 have already gone above and beyond their 2005 numbers: business filings in 2005 were at 34,222, whereas in 2009, the number hit 58,721-a 52% increase over the same figure in 2008 and 72% higher than business filings at pre-BAPCPA levels. While consumer filings are slowly creeping back to their pre-BAPCPA numbers, business filings have already mightily surpassed that threshold.
During 2009, Chapter 11 filings experienced the biggest surge, growing 69% over 2008 levels. Chapter 7 liquidation filings comprised the largest percentage of business filings and also increased 51%. Additionally, through 2009, monthly business filings reached roughly twice what they were before the implementation of BAPCPA.
Jacob Barron, NACM staff writer