US Chapter 11 bankruptcy filings hit 35-year low in 2020

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US Chapter 11 bankruptcy filings hit 35-year low in 2020

Chapter 11 bankruptcy filings in the United States fell to a nearly 35-year low last year as a flurry of Government stimulus alongside a broad-based incentive on corporate taxation appeared to have momentarily blunted the impacts of soaring pandemic cases in the United States which had entered into a recession in February last year, a bankruptcy court data provider Epiq AACER had reported later last week.

In point of fact, according to the report from Epiq AACER, a US-based market leader in bankruptcy court data, workflow automation software and services employing more than 5,500 workers across 80 data centres in 14 countries, overall bankruptcy filing including all personal alongside other business-associated bankruptcies fell to 529,068 last year, compared to an average of 800,000 Chapter 11 bankruptcy filings over the recent years.

US bankruptcy court filings fall to lowest since 1986 last year

Although the firm’s compilation of bankruptcy cases in the United States had reported a sharp drop in 2020 following a trillion-dollar stimulus bill passed in the US Congress in April last year alongside a near-zero benchmark borrowing cost, chapter 11 bankruptcy court filings for larger businesses climbed 29 per cent last year to 7,128, compared to a figure of 5,158 registered in 2019, suggesting that a swathe of major businesses including brick-and-mortar retailers like of JC Penney had failed to grapple with the pandemic-led economic downturn.

Nonetheless, a slew of small-businesses, which had been on the verge of extinction, seemed to have survived the fiscal fallouts of the pandemic outbreak with a mass-scale vaccination campaign on sight what analysts claimed could lead to a jump in an economic recovery by Spring this year.

However, voicing a downbeat tone, Epiq Senior Vice President Chris Kruse said in a press release later last week that US household alongside non-commercial bankruptcy filings would likely to shoot up substantially over the second half of 2021 unless an upcoming Biden Administration, scheduled to take over the White House by January 20, could unveil further monetary stimulus for individuals which would help millions of laid-off Americans pay out their debt-loads.