How Common Is It for Businesses to File for Bankruptcy Under Chapter 11?

Numerous businesses of all sizes file for reorganization under Chapter 11 of the U.S. Bankruptcy Code every year. As a result, if you are considering taking advantage of the reorganization process to restabilize your business’s finances in 2025, you are not alone. Learn more from an experienced Miami Chapter 11 bankruptcy lawyer.

Chapter 11 Bankruptcy Filings Are on the Rise

According to the latest data from the U.S. Courts, Chapter 11 bankruptcy filings are on the rise. During the federal fiscal year ending September 30, 2024, the U.S. Courts reported that 22,762 businesses filed for bankruptcy, with 9,012 of these businesses filing under Chapter 11.

Both of these figures represent substantial increases from prior years. Here are the statistics:

• 2024: 22,762 business bankruptcy filings, with 9,012 filings under Chapter 11
• 2023: 17,051 business bankruptcy filings, with 6,472 filings under Chapter 11
• 2022: 13,125 business bankruptcy filings, with 4,762 filings under Chapter 11
• 2021: 16,140 business bankruptcy filings, with 5,622 filings under Chapter 11
• 2020: 22,391 business bankruptcy filings, with 8,188 filings under Chapter 11

The high numbers in 2020 (and, to an extent, in 2021) are almost certainly attributable to the economic effects of the COVID-19 pandemic. Thus, it is notable that five years later, we saw an even higher number of business bankruptcy filings without the pandemic’s impacts on businesses. According to Reuters, “[r]ising interest rates, inflation, higher labor costs, and post-pandemic shifts in consumer spending were common factors cited by companies that filed for bankruptcy in 2024.” Notably, Reuters also reports that:

“Bankruptcy experts expect those factors to continue to drive companies over the brink [in 2025]. Several particularly hard-hit industries that struggled in 2024 will continue to experience financial distress and restructuring activity in 2025, including health care, automotive, casual dining and retail.”

It is also noteworthy that while business bankruptcy filings (including Chapter 11 filings) rose above their pandemic-era levels in 2024, the same cannot be said for non-business filings. In 2020, 590,170 individuals filed for bankruptcy. More than 100,000 less (481,350) filed for bankruptcy in 2024.

The Data Already Show a Further Increase in Chapter 11 Filings in 2025

Data from BankruptcyWatch.com indicate that we are already seeing a further increase in Chapter 11 filings in 2025. According to the online platform, while 92 businesses filed for bankruptcy in the third week of 2024, 138 businesses filed for bankruptcy in the third week of 2025. Chapter 7 and Chapter 13 filings are up so far in 2025 as well.

The online platform’s data also show that bankruptcy filings have increased throughout the month of January in many jurisdictions, including all three federal jurisdictions in Florida. During the third week of January, 463 businesses filed under Chapter 11 across Florida’s three federal jurisdictions, compared to 162 filings statewide the week prior.

Other Notable Chapter 11 Bankruptcy Statistics

BankruptcyWatch.com’s data shed light on some other notable Chapter 11 bankruptcy trends as well. For example, its data show that filings tend to spike at the end of the month and that February, March, August, and October tend to be among the busiest months for new filings. The online platform also notes that the rise in Chapter 11 filings in 2024 is likely partially attributable to an increase in related case filings, which are cases in which multiple parties file for reorganization following a related party’s initial filing.

Here are some additional Chapter 11 bankruptcy statistics from the American Bankruptcy Institute (ABI):

• Subchapter V filings under Chapter 11 saw a 28 percent year-over-year increase in late 2024 based on the ABI’s most-recent data.
• While Chapter 11 filings decreased year-over-year in November 2024, this “was influenced by the large number of related filings in the WeWork case” in the prior year.
• In Florida, there were actually more Chapter 11 filings in 2019 than there were in 2020. While bankruptcy filings in Florida tend to follow national trends, Florida averages slightly less bankruptcy filings per capita than the rest of the country.
• While Chapter 11 filings in Florida have seen a sharp decline over the past 15 years, new filings began increasing in 2021.
• Nationally, bankruptcy filings are up 16.8 percent according to the ABI’s latest data. In Florida, they are up slightly less—having increased by 14.2 percent based on the latest annual totals.

Should Your Business Reorganize Under Chapter 11 in 2025?

Of course, while statistics are interesting, they ultimately have little (if any) direct impact on individual businesses. With this in mind, should your business reorganize under Chapter 11 in 2025?

Answering this question requires careful consideration of several factors. Additionally, if you are considering a Chapter 11 filing, you will also likely want to consider filing under Subchapter V. This is a relatively new section of Chapter 11 that establishes streamlined procedures for small business bankruptcies, with “small businesses” being defined as those with less than $3.02 million in debt.

Would reorganizing your business’s debts position it for long-term success? Is reorganization under Chapter 11 (or Subchapter V) preferable to pursuing a bankruptcy alternative, such as an informal workout? Would any of your business’s creditors have grounds to challenge its request for reorganization? These are just a few examples of the factors that require consideration. We recently compiled a list of resources that our lawyers have created for companies considering Chapter 11 filings, and we encourage you to review this list if you are considering a business bankruptcy in 2025.

Request a Confidential Consultation with a Miami Chapter 11 Bankruptcy Lawyer at Edelboim Lieberman

Are you considering a Chapter 11 bankruptcy in 2025? Do you have questions about reorganizing your company’s debts under Subchapter V, or about the reorganization process in general? Do you have questions about the alternatives to reorganizing your debts through bankruptcy? If so, we invite you to get in touch. To schedule a confidential consultation with a Miami Chapter 11 bankruptcy lawyer at Edelboim Lieberman, please call 305-768-9909 or request an appointment online today.