Business and personal bankruptcy filings in the United States increased in July
The number of businesses seeking Chapter 11 protection rose 52% in July from the previous year, as the coronavirus pandemic shook the economy and upended businesses from coast to coast.
Personal bankruptcy filings have also increased, according to legal services firm Epiq Systems Inc.The upward trend in bankruptcy filings in the United States is expected to continue in the coming months as assistance programs funded by the government, intended to soften the blow of the coronavirus pandemic, come to an end.
A total of 642 companies filed for Chapter 11 creditor protection in July. In the first seven months of the year, Chapter 11 filings rose 30% from the previous year to around 4,200, Epiq said based on data from its Aacer business unit.
“The increase in recent bankruptcies is due to a combination of pre-Covid debt levels and the current zero income environment,” said Deirdre O’Connor, managing director of corporate restructuring at Epiq.
A number of leading companies filed for bankruptcy in July, including clothing retailers Brooks Brothers Group Inc. and Ann Taylor owner Ascena Retail Group Inc., as well as restaurant chain California Pizza Kitchen Inc. ., gunmaker Remington Outdoor Co., and California oil driller. Resources Corp.