This is the time of year that financial experts love, as the final data from 2013 starts to flow in and allows experts to analyze the recent year as a whole. There are many indicators that experts look at to try to judge the state of the economy and what to expect in the year to come. One of those indicators in the business sector is determining how many commercial bankruptcies were filed in any given year. Now, according to a recent report, from the 2013 bankruptcy data it appears that commercial bankruptcy filings last year dropped significantly. In fact, the number of commercial bankruptcies filed last year even dropped below the number from 2007 - the year when the economy really began to tank.
The data, which reportedly includes bankruptcy filings made under Chapter 11 and Chapter 13 of the bankruptcy code, indicates that the number of filings in 2013 fell 24 percent when compared with the number of filings made in 2012. The total number of commercial bankruptcies filed in 2013 stood at 43,934.
At least one financial expert claimed that one of the reasons for the drop in filings is that interest rates remain at incredibly low levels. This, the expert claimed, allowed companies that may have otherwise filed for bankruptcy to take on loans to stave off severe financial issues.
Although this data may be taken as a good sign that the economy is at least on its way back to normal, the fact remains that there are far too many companies that will have to deal with the still plodding economic recovery. For some, Chapter 11 bankruptcy will be an option to consider, especially since this type of bankruptcy protection allows a company to make the changes that are necessary to ensure long-term financial security.
Source: The Wall Street Journal, "U.S. Commercial Bankruptcy Filings Fell 24% in 2013," Emily Glazer, Jan. 7, 2014