Data from Epiq Systems shows that the number of bankruptcies in the first quarter of 2016 fell 5 percent from the same time period in the preceding year. That translates to 195,565 commercial and noncommercial filings between Jan. 1 and March 31. While the overall rate of bankruptcy declined, there was a 24 percent increase in commercial filings as well as a 9 percent increase in Chapter 11 filings by businesses.
In addition, there was an increase in the number of bankruptcies filed in March 2016 compared to February 2016 even though March 2016 filings were down 4 percent from March 2015. There was also an increase in noncommercial filings from February 2016 to March 2016. However, the 74,981 noncommercial filings in March 2016 was down 5 percent from March 2015. While there have been 22 consecutive quarters of declining bankruptcy rates, the drop is beginning to slow down.
It is believed that weakness in the retail and energy sectors are what is driving commercial filings. Overall, Tennessee, Georgia and Alabama had the highest bankruptcy rates per capita while the national bankruptcy rate was 2.51 filings per 1,000 people over the first three months of the year.
For consumers who are seeking relief from large obligations, there may be many benefits of bankruptcy. First, an individual may have debts discharged within weeks without the need to pay the entire balance. Second, creditors generally cannot contact a debtor during an open bankruptcy case nor can they seek payment after debts have been discharged. An attorney can describe other advantages of this form of debt relief while outlining the eligibility requirements.