When starting a new business many people people do not think that bankruptcy could happen to them. The unfortunate reality is that whether it is poor personal choices or unforeseen outside factors, corporate bankruptcy can happen to either small or large businesses. Regardless of product, service, or how long a company has been operating, debt can be accrued and become too much for both business owners and equity holders. Here are 10 facts about corporate bankruptcy in 2020.
10 Stats about Corporate Bankruptcy
- Chapter 7 bankruptcy is the common form of filing in the United States to date, though case have declining from a spike in 2005 during the recession (Fool).
- California is consistently the leader of bankruptcy claims nation wide. So far in 2020 California has reported 18,764 bankruptcy filings, (ABI).
- The COVID-19 Pandemic has resulted in an increase in business bankruptcy filings from 2019 to 2020 (US Courts).
- In general bankruptcy filings have been declining steadily over recent years with 2010 reporting 1.6 million filings compared to 2018 where only 770,000 cases were reported (Fortunly).
- When a company choses to file for chapter 7 bankruptcy the national average for attorney fee is $1,250 per case (Fortunly)
- Historically chapter 13 bankruptcy cases are 18 times more likely to be dismissed and the average attorney fee for chapter 13 is $3,200 (Fortunly).
- 2019 showed 114 companies with over 100 million dollars in liabilities filed for chapter 11 protection which was a 21% increase from 2018 (Jonesday).
- The amount of public companies that filed for bankruptcy in 2019 was 63. For comparison, in 2009 at the hight of the recession, 211 public companies filed for bankruptcy (Jonesday).
- In 2019 18 public companies with over 1 billion dollars (billion dollar club companies) filed for bankruptcy. A notable company that filed in 2019 was PG&E, making it the 6th largest bankruptcy of all time (Jonesday).
- 2020 has shown over 68 thousand companies filing for chapter 11 protection. This spike is most likely attributed to the COVID-19 Pandemic (US Courts).