A woman enters the U.S. District Bankruptcy Court for the Southern District of New York in Manhattan, New York, U.S., January 9, 2020. REUTERS/Brendan McDermid/File Photo
U.S. Chapter 11 bankruptcy filings jumped 68 percent in the first half of 2023 from a year earlier, Epiq Bankruptcy, a provider of U.S. bankruptcy filing data, said on Monday.
SVB Financial Group, Envision Healthcare Corp, Bed Bath & Beyond, Party City Holdco, Lordstown Motors and Kidde-Fenwal were among some casualties of decades-high interest rates and sticky inflation as the era of easy money drew to a close.
Bed Bath & Beyond prepares for bankruptcy filing -WSJ
“The growth in filings is reflective of more families and businesses facing surging debt loads due to rising interest rates, inflation, and increased borrowing costs,” American Bankruptcy Institute’s executive director Amy Quackenboss said in a statement.
The Federal Reserve has raised its key interest rate to a target range of 5 percent-5.25 percent after 10 straight hikes, making borrowing more expensive for companies and individuals.
The U.S. central bank left interest rates unchanged in June, but sees two more hikes by the end of 2023.
Fed leaves rates unchanged, sees two small hikes by end of 2023
A total of 2,973 commercial Chapter 11 bankruptcies were filed in the first six months of 2023, Epiq said, compared to 1,766 in the same period last year.
Additionally, individual Chapter 13 filings also saw a 23-percent jump during the same time-period.
Bankruptcy filings for small business, categorized as Subchapter V elections within Chapter 11, jumped 55 percent, according to the data.