It’s no surprise to any that have lived through the recent COVID-19 pandemic that the economy has suffered greatly. Individuals who relied on their weekly paycheck found themselves out of work for months and waiting on unemployment checks. Businesses have found themselves unable to employ workers and produce the amount of products and services they’re used to. Recently, there have been a number of statistics released about how this pandemic is affecting the economy. Overall, there have been many disruptions, increases in bankruptcy filings, from May to June, and also from 2019 to 2020. Meanwhile, non-business filings fell, surprisingly. Here is a brief overview.
May Business Bankruptcy Filings Increased 48 Percent
One of the biggest trends that is starting to show due to the recent pandemic is business bankruptcy filings. Some of the biggest names in the business including J.Crew, Gold’s Gym, and Neiman Marcus have all filed for bankruptcy amidst the pandemic. Comparing the May statistics for business bankruptcy filings from this year and last year, there has been a stark 48 percent increase in the number of filings. There were 722 companies that filed for bankruptcy in May 2020.
June Commercial Filings Are Up 43 Percent
Like business bankruptcy filings, commercial filings have shot up as well. When you take a look at the commercial filings for Chapter 11 bankruptcy for this past June, you’ll notice a total of 609 new filings. Compare this to the 424 filings that were submitted last year during the month of June, and you’ll get a 43 percent overall increase in Chapter 11 bankruptcy filings in the commercial sector. Any bankruptcy lawyer can assist your business in filing for Chapter 11 bankruptcy.
Chapter 11 Filings Up 26 Percent Over Last Year
If you zoom out and examine the total commercial Chapter 11 filings for a longer period of time, you’ll still notate an increase. From January through June last year, there were a total of 2,855 commercial Chapter 11 filings. This same period for the year of 2020 has revealed 3,604 new filings. This is an overall increase of 26 percent for commercial bankruptcy filings for this year so far. COVID obviously has had a major impact on businesses large and small, and on consumer trends.
July Bankruptcies
July appears to have hit clothing retailers the hardest. 200-year-old menswear retailer Brooks Brothers filed for bankruptcy. On the women’s side, Ascena Retail Group parent to Ann Taylor, LOFT, Lane Bryant, and other women’s clothing stores has filed for bankruptcy. RTW Retailwinds, owner of women’s retailer New York & Co. also filed for bankruptcy.
Although they haven’t declared bankruptcy yet Tailored Brands are closing 500 of their Men’s Wearhouse, Jos. A. Bank, and K&G stores. Heritage brands which own Calvin Klein and Tommy Hilfiger, Van Heusen and Izod is also closing 162 stores.
Non-Business Filings Fell By 15 Percent
One unexpected statistic at first glance is non-business bankruptcy filings. Comparing March of this year to March of 2019, fewer individuals have filed for bankruptcy. This surprising statistic includes Chapter 7, 11, and 13 bankruptcies. This drop may be attributed to the decrease in the availability of the U.S. Government to receive and process bankruptcy filings. It is also possible that the supplemental Federal unemployment benefits and the $1200 stimulus program has been sufficient to fend off individual bankruptcies.
There’s no doubt in most people’s minds that the pandemic has greatly affected the economy. From businesses to individuals, there’s a lot of unsteadiness going on right now. Hopefully, the above statistics have helped you to discover some new facts about how the COVID-19 pandemic is affecting the United States both in the private and commercial sectors.
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Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan
