Amid economic challenges, bankruptcy filings in the US surged by 18% in 2023, propelled by surging interest rates, stricter lending criteria, and the lingering repercussions of the pandemic, according to Epiq AACER, a provider of U.S. bankruptcy filing data.

Total bankruptcy filings in 2023 reached 445,186, a noticeable escalation from 2022’s count of 378,390.

Notably, commercial Chapter 11 filings shot up by 72% to 6,569 in 2023, while consumer filings increased by 18% to reach 419,559 compared to the previous year.

Looking at December 2023 figures, total bankruptcy filings spiked to 34,447, up 16% year-over-year, with commercial filings demonstrating an 18% rise in December, as indicated by the report.

According to Michael Hunter, Vice President of Epiq AACER, “As anticipated, we saw new filings in 2023 increase momentum over 2022, with a significant number of commercial filers leading the expected increase and normalization back to pre-pandemic bankruptcy volumes. We expect the increase in the number of consumer and commercial filers seeking bankruptcy protection to continue in 2024 given the runoff of pandemic stimulus, increased cost of funds, higher interest rates, rising delinquency rates, and near historic levels of household debt.”

Furthermore, John M. Mason, a Seeking Alpha analyst, remarked, “Corporate bankruptcies in America are set to reach their highest level since 2010,” citing a recent analysis.

While bankruptcy case counts are projected to continue climbing in 2024, they still fall short of surpassing the 757,816 bankruptcies filed in 2019, the year before the pandemic struck.