Recent Trends in Bankruptcy Filings

12/31/2013

ARROW SUPERIORSmallThe bank failures and housing bubble that spawned the economic slowdown of the late 2000’s also brought with it a rise in bankruptcy across the nation. In the past 12-18 months, most experts agree that the trend is moving away from business restructuring, but some industries are still suffering.

Here’s a look at five trends in bankruptcy filings as they stand at the end of 2013.

  • Business bankruptcies are down by about 30 percent from 2012. Many businesses are employing a “lend and extend” tactic rather than undergoing true restructuring. This involves handling debt by paying a fee to get extensions on payments from creditors.
  • Energy producers are restructuring at a higher rate due to low natural gas prices. Heavily unionized companies are also at risk for bankruptcy due to the high cost of labor and benefits.
  • Filings against directors and officers of companies that go bankrupt are up as creditors try to recover losses by accessing executives’ liability insurance. However, corporate law provides protection to executives seen to be acting in good faith, so this tactic is rarely successful.
  • As long as interest rates stay low, some creditors can continue to refinance their way out of trouble and avoid bankruptcy. This strategy won’t work for businesses that have limited access to credit or businesses whose problems are too big or complex to put off.
  • Many banks are more willing to work with companies in debt to help them get back on track rather than forcing them into bankruptcy. When the credit market is tight, there are fewer customers for banks, so they’d rather keep the ones they have for potential business in the future than turn them away during tight times.

Experts also predict instability for the coal industry due to the availability of cheaper alternatives and waning support, and for the healthcare industry as the Affordable Care Act is implemented. Municipalities are restructuring at a higher rate as well because of the burden of pensions, labor costs, infrastructure, and overall declines in tax revenues.

Are you considering bankruptcy? Whether you are a business owner or individual, Leiderman Shelomith, PA, will look at your individual case and help you determine the best course of action for you or your business.

Please keep in mind that every case is different, so if you are thinking of filing bankruptcy, and would like to schedule a no-cost consultation, please contact our office by completing the form on this website, calling us at 954-920-5355, or e-mailing us at info@lslawfirm.net

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+

Leave a Comment


  Leiderman Shelomith
  Bankruptcy Attorneys

  2699 Stirling Road, Suite C401
  Fort Lauderdale, FL 33312
  Phone: 954-920-5355
  Fax: 954-920-5371

CONNECT WITH US

 
   

Attorney Advertising. © Copyright 2017 Leiderman Shelomith. All rights reserved. Please keep in mind that every case is different, so if you are thinking of filing bankruptcy,
and would like to schedule a no-cost consultation, please contact our office by completing the form on this website,
calling us at 954-920-5355, or e-mailing us at info@lslawfirm.net.