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Bankruptcy filings for week ending August show largest decline since May

An analysis from the American Bankruptcy Institute reveals bankruptcy filings for the last week of August went down 45.6 percent compared to the same week in 2019, though the next reporting period could potentially show a statistical spike.

For those following bankruptcy trends in one of the hardest years ever to confront small business, there was both good news and a caveat this week from the American Bankruptcy Institute.

The good news? The 9,923 bankruptcy filings for the week ending Aug. 30 were down a startling 45.6 percent compared to the same COVID-free week in 2019. It was the largest weekly decline since May.

The caveat? Because the week ended Aug. 30, it will push additional filings into the next reporting period ending Sept. 6, creating the potential for a statistical spike. The weekly filing totals, ABI said, can be distorted by several factors, including the surge in filings that occurs on the last business day of each month.

Filings during the upcoming week will also be skewed by Labor Day; it fell on Sept. 2 last year, which depressed filings for that week. As a result, bankruptcy filings will likely show their first year-over-year increase since February.

Those conclusions come from ABI’s Ed Flynn, coordinating editor for the ABI Journal and a 30-year veteran of the Executive Office for U.S. Trustees and the Administrative Office of the U.S. Courts. Flynn reports that the nation saw 99 Chapter 11 filings in that final week of August, down slightly from 103 filings from the same week last year.

To read his full analysis, click here.