Contrary to the economic havoc wreaked by the COVID-19 pandemic, now well into its third year, bankruptcy filings through November have continued on a downward trend. Filings in 2022 across all chapters are down approximately 9%, compared to the same time last year, according to court data from Docket Alarm.
The first eleven months of the year saw 352,826 bankruptcy filings, down from the 386,269 such filings made at the same point last year.
Earlier in the year, Law Street Media reported that August saw the first year-over-year increase in monthly bankruptcy filings since the pandemic began. That trend held for September, with 4% more bankruptcies being filed this year than last. October 2022 saw an almost identical amount of cases filed this year when compared to last. November saw the trend fully reverse, with more cases filed in 2021 than 2022.
The geographic outlook for 2022 closely resembles 2021. The deep South still faces the most bankruptcies per capita. Through November, 436 bankruptcies per 100,000 people were filed in the Western District of Tenneseee, home to Memphis, in 2022, up from 357 in all of 2021. Similar trends hold for other Southern hotspots, indicating that despite bankruptcies decreasing overall, they are becoming increasingly concentrated.
The Big Picture
2022’s downward trend in bankruptcy filings is in line with a years-long trend. Filings have steadily decreased year-over-year since 2010. Over a million cases were filed a year until 2014, three times what was filed in this year.
While the decrease has been steady since the economic crisis of 2007-08, the trend has accelerated even more so in the pandemic years, perhaps signaling the efficacy of measures like the Paycheck Protection Program and stimulus checks in helping Americans weather an economic storm.