How Many Public Companies Go Bankrupt Every Year?

Publicly traded companies often opt for Chapter 11 bankruptcy instead of Chapter 7, as it allows them to remain in control of their business and take part in the bankruptcy process. This means that, instead of handing over all their assets to a trustee for liquidation, as they would have to do in Chapter 7, the company can restructure their finances and, hopefully, become profitable again. If the process fails, all assets are liquidated and stakeholders are paid according to absolute priority. The COVID-19 crisis has had a negative impact on the economy, leading to an increase in bankruptcies.Studies show that 8% of people have filed for bankruptcy multiple times, making up 16% of all bankruptcies.

The court held that the bankruptcy court should analyze whether rejecting the agreement would cause direct harm to the public interest by disrupting consumer supply or posing a threat to health and well-being, which was not found in this case. Contrary to popular belief, most bankruptcies are personal rather than corporate. A Harvard University study revealed that two-thirds of all bankruptcies were due to medical expenses.Corporate bankruptcies account for only 3% of the total number. Thanks to public platforms that release these bankruptcy statistics, many measures have been implemented in an effort to reduce these numbers.

Of the total number, 59,058 were non-commercial bankruptcies and 2,682 were commercial bankruptcies. Data on U. S. bankruptcies shows that many people who file for bankruptcy have low household incomes.Although this is only a small percentage of personal bankruptcies in the United States each year, it still puts pressure on the system to tighten the criteria for filing for bankruptcy.

Charles Preus
Charles Preus

Charles Prius is a financial writing expert and the lead content writer for With a deep understanding of financial issues, he is dedicated to providing individuals and businesses with the information and resources they need to make informed decisions about bankruptcy. Charles's expertise extends beyond finance, as he is also a pop culture enthusiast and active on social media. His interests also include tea, internet exploration, and music. With a passion for helping others and a comprehensive knowledge of finance and popular culture, Charles is the ideal fit for the team.

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