Total bankruptcy filings drop nearly 50 percent in third week of February compared to one year ago

Total filings were down by nearly 50 percent during the third week of February compared to the same week last year, according to a report from the American Bankruptcy Institute.

Once again, the largest decline involved Chapter 13 filings, which were down by slightly over 63 percent from last year.

According to the report, the recent winter storm to hit the Southern and Eastern states last week was likely a factor behind the relatively low filings during the week.

Only 139 bankruptcy cases were filed in the State of Texas last week, down by 72 percent from the previous year. Filings in Oklahoma were also down about 72 percent during the week.

Chapter 11 case filings were fairly low during the week (90), down by more than 40 percent from 158 filings during the same week last year.

The 39 subchapter V cases filed during the week represented the highest weekly total in nearly three months. In the first year that subchapter V was available (year ending February 18, 2021), 1,537 such cases were filed.

The $7.5 million debt eligibility limit for subchapter V provided by the CARES Act last year is currently set to sunset on March 27. If not extended by Congress, the debt eligibility limit will will reset to the original debt limit of $2,725,625. Flynn’s analysis has found that nearly 30 percent of subchapter V have exceeded the original debt eligibility amount.