Total bankruptcies have continued the sharp decline that has existed since the beginning of the Covid pandemic.
There was a twist in 2022, however.
Chapter 7 continued its sharp drop.
Chapter 12 continued its sharp drop.
Chapter 11 increased extremely slightly.
Chapter 13 increased sharply, completely revering the ground lost in 2021.
Chapter 13 is individual reorganization, conducted over a 3 to 5 year period. If the individual is unable to successfully fulfil the terms, Chapter 13 can, on the request of creditors, be converted to Chapter 7, which is individual liquidation.
This is most likely the natural result of the various Covid emergency subsidies and programs ending, combined with the effects of inflation.
I suspect, as time goes on, a good portion of those Chapter 13 bankruptcies will end up going into Chapter 7.
On the whole, however, total business and non-business bankruptcy filings remain down.
Bankruptcy can be filed “in forma pauperis” which waives the filing fee requirements for destitute people. And there are usually non profits available that will file a simple Chapter 7 on a pro bono basis.
Apparently euro bankruptcies are rising a a substantial clip.
Two probable factors
Russia sanctions affect Europe more than the US
Euro companies including pension funds tend to invest in gov’t bonds (instead of stocks) AND THEN USE THOSE BONDS AS COLLATERAL
Euro environmental policies are drop-kicking anything ag related: wine, cheese, flowers, grains, cooking oil, everything. Farmers, farm suppliers, farm lenders, farm ing villages are all in big trouble over there.
Propping that up as anywhere near enough is about as pathetic as the number itself. Stop butting in on me with these below average IQ bootlickings. I’m not here to (D)umb myself down for the sidelines.
As soon as everyone had to stay home,
and got free money via PPP
a lot of people formed a (ahem, cough cough) “business.”
(I even encountered anecdotes of bots that just start up small businesses and applied for free PPP money.)
How many of those are real?
How many of the real untried untested start-up businesses will survive when neither they nor their customers are getting free money?
How many start-up businesses NOW (and in the foreseeable future) are at a disadvantage because their field is crowded with free money competitors?