The post US Bankruptcy Filings Surge in 2023; Expected to Climb Further in 2024 appeared on BitcoinEthereumNews.com.

The United States witnessed a significant surge in bankruptcy filings in 2023, with an overall increase of 18%, according to Reuters. This upswing has been largely attributed to the confluence of several economic factors, primarily post-pandemic economic changes and rising interest rates. Consumer bankruptcy filings mirrored this trend with an identical 18% rise, indicative of the widespread impact across various sectors. Contributing Economic Factors Economic Downturn and High Interest Rates: The economic downturn, coupled with high interest rates and inflation, has been a primary driver behind the increase in bankruptcy filings. The low-interest-rate environment in preceding years had encouraged extensive borrowing and risk-taking, leading to financial stress when the economic landscape shifted​​. Tougher Lending Standards and Pandemic-Era Backstops: The surge is also a result of tougher lending standards and the phasing out of pandemic-era financial backstops. These changes have put additional pressure on companies and individuals struggling with debt repayment and financial restructuring​​. Long-Term Effects of the COVID-19 Pandemic: The pandemic’s long-term effects, including economic uncertainty and job losses, have led to a rise in personal debt, further exacerbating the bankruptcy situation​​. Impact on the Financial Sector Corporate Bankruptcy Filings: The financial sector, in particular, has seen a notable increase in corporate bankruptcy filings. For example, SVB Financial Group’s Chapter 11 bankruptcy filing marked a significant event in the sector, representing the largest corporate bankruptcy filing in the financial sector for the year, with more than $3.3 billion in unsecured claims​​. Other Significant Bankruptcies: Additionally, other regional banks and financial institutions, such as GloriFi and cryptocurrency lender Genesis Global Holdco LLC, have also filed for bankruptcy, indicating the breadth of the financial strain across the sector​​. Historical Context: Since 2010, there have been 13 financial bankruptcies with over $1 billion in liabilities at the time of filing. This historical perspective…

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Filed under: News - @ January 4, 2024 7:26 pm