Bankruptcy is a legal process that allows individuals, businesses, and other entities to eliminate certain types of debt or reorganize their financial affairs to pay off their creditors.
The process is designed to give individuals and entities a fresh start and to prevent creditors from pursuing collection activities while the bankruptcy case is ongoing.
In the United States, bankruptcy cases are handled by federal bankruptcy courts, and the process is governed by federal law.
The 10 Most Impactful U.S. Bankruptcy Statistics
- During the first quarter of 2023, there was a 19 percent rise in the rate of bankruptcy filings for commercial companies.
- California is the state with the most bankruptcies filed in 2022.
- There was a 17% increase in total individual filings from March 2022 to 40,063 compared to 34,214.
- In the period that ended December 31, 2021, a total of 470 Chapter 11 bankruptcies were filed.
- The number of Chapter 7 bankruptcy filings in the United States in 2021 decreased by 24% to a total of 397,370.
- Bankruptcy filings decreased by 6.3% in 2022 compared to 2021, with a decrease from 413,616 to 387,721.
- In December 2020, the total number of new U.S. bankruptcy filings across all chapters was 34,304, marking the lowest monthly total since January 2006.
- Approximately 59% of Americans who file bankruptcy report it is due to medical expenses.
- In 2019, the bankruptcy rates for 13 out of the 15 main agricultural states exceeded their 10-year averages.
- In 2020, about 60% of bankruptcy filers reported income under $50,000 per year.
In the first quarter of 2023, there was a 19 percent increase in commercial bankruptcies.
In the first quarter of 2023, total business filings increased by 19 percent with 5,733 filings compared to 4,808 in 2022.
Commercial Chapter 11 filings rose by 77 percent to 1,301 in the first quarter of 2023 from 735 in the first quarter of 2022. Small businesses filing for Subchapter V elections increased by 33 percent, with 371 filings in the first quarter of 2023 compared to 280 from the first quarter of 2022.
Individual Chapter 7 filings increased by 12 percent to 57,172 in the first quarter of 2023 from 51,083 in the first quarter of 2022. Individual Chapter 13 filings increased by 28 percent to 42,364 in the first quarter of 2023 from 33,189 in the first quarter of 2022. 
California had the highest number of bankruptcy filings in 2022.
In 2022, the top five states with the highest number of bankruptcy petitions made up 31% of all filings in the United States.
The following states reported the most number of bankruptcies declared in 2022. 
The total individual filings increased by 17% from March 2022, with 40,063 filings compared to 34,214.
The number of individual filings rose from 34,214 in March 2022 to 40,063 in the current month, reflecting a 17 percent increase.
Year-over-year, individual Chapter 7 filings increased 13 percent from 21,594 to 24,467, while individual Chapter 13 filings increased by 24 percent from 12,532 to 15,537. 
During the period ending on December 31, 2021, there were 470 filings for Chapter 11 bankruptcy.
According to U.S. Bankruptcy Courts statistics, there were 470 non-business Chapter 11 filings nationwide during the 12-month period that ended December 31, 2021. This is in contrast to 279,649 non-business Chapter 7 filings and 119,150 non-business Chapter 13 filings. 
The total number of Chapter 7 bankruptcy filings in the United States decreased to 397,370 in 2021, showing a 24% decline.
Chapter 7 bankruptcy is commonly referred to as “liquidation bankruptcy” due to its quick and straightforward process, making it the most frequently filed type of bankruptcy.
According to the American Bankruptcy Institute (ABI), nationwide bankruptcy filings in 2021 decreased by 24% to 397,370. The ratio of Chapter 7 filings among all bankruptcies remained unchanged at 69%. 
There was a 6.3% decrease in bankruptcy filings from 2021 to 2022, with a drop from 413,616 to 387,721.
The Administrative Office of the U.S. Courts reported that there were 387,721 bankruptcy filings in 2022, compared to 413,616 in 2021.
There was a decrease in bankruptcy filings for businesses by 6 percent, from 14,347 to 13,481 in the time span between December 31, 2021, and December 31, 2022. Non-business bankruptcy filings also decreased by 6.3 percent, from 399,269 to 374,240. 
In December 2020, there were 34,304 new U.S. bankruptcy filings across all chapters, which represented the lowest monthly total since January 2006.
In December, the number of new U.S. bankruptcy filers across all chapters was 34,304, marking the lowest monthly total since January 2006.
Commercial Chapter 11 filings saw a year-over-year increase of 29%, with 7,128 new filings in 2020 compared to 5,518 in 2019. 
Medical expenses are a common cause of bankruptcy for about 59% of Americans.
Bankruptcy can be caused by various financial burdens, with loss of income being the primary reason for 78% of cases in the U.S.; medical care costs are also a significant factor, cited by 59% of people.
These statistics suggest that medical debt bankruptcies, in spite of insurance, are a prevalent issue in the country.  The cost of health care is a major factor in financial distress for many. Medical bankruptcy filers often accumulate debt quickly due to a major health event such as a heart attack or a stroke.
In 2019, 13 out of the 15 main agricultural states had bankruptcy rates that surpassed their 10-year averages.
In 2019, bankruptcy rates were higher than the 10-year averages for 13 of the 15 main agricultural states. Among these States, Georgia and Wisconsin had the highest bankruptcy rates.
Georgia’s bankruptcy rate of 21.6 per 10,000 eligible farms may have been influenced by lower chicken and farmland prices.
Broiler chickens generated half of the state’s total farm cash receipts in 2019, but prices declined by 30 percent from 2014 to 2019.
Agricultural land values in Georgia also fell by 27 percent from 2009 to 2019 in real terms. Lower land prices can limit farmers’ ability to secure loans and refinance debts. 
In 2020, the majority of those who filed for bankruptcy reported an annual income of less than $50,000.
In 2020, about 60% of bankruptcy filers reported income under $50,000 per year. According to the American Bankruptcy Institute (ABI), the median annual household income of those who filed for bankruptcy in 2020 was just over $40,000 and nearly 80% of filers had an annual income below $75,000. 
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