Question

Do you think the number of bankruptcies is growing or is it declining? Why?

Answer 1

Bankruptcies mean an individual, HUF, professional, Business, and many more fail to pay their debt towards bank and bank for recovery of debt sell there personal properties are known as bankruptcy. Consumers could consider debt consolidation options Debt Management Plans, Debt Consolidation Loans, and Debt Settlement option to avoid filing for bankruptcy.

As in the current situation i.e due to coronavirus, many small businesses end up with bankruptcy. Companies forced to close the business due to a government's attempts to stop the virus spread have huge debts and uncertain for returning to normal operations. As 560 companies Chapter 11 bankruptcy filings in April, a 26% increase from last year

Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record of mega bankruptcies — filings by companies with $1 billion or more in debt.

In the United States bankruptcy increased over the last century, and especially so from 1980 to 2005. for individual causes of bankruptcy include reduced income, job loss, credit debt, illness/injury, unexpected expenses, and preparing for divorce.there is an act Bankruptcy Abuse Prevention and Consumer Protection Act in 2005 which prevents bankruptcy. Alabama had the highest bankruptcy filing rate in 2019.

Type of bankruptcy

• Chapter 7: Liquidation

• Chapter 13: Repayment Plan

• Chapter 11: Large Reorganization

• Chapter 12: Family Farmers

• Chapter 15: Used in Foreign Cases

• Chapter 9: Municipalities

statistics of the bankruptcy of US:-

Here are some of the biggest name firms to file for bankruptcy in 2020:-

In April

Diamond Offshore and Whiting Petroleum

In May

J.Crew

Gold’s Gym and many more

In June

GNC

24 Hour Fitness and many more

Conclusion:- As per these statistics, we can say that number of bankruptcies is growing with a higher percentage as compared to the previous year on the basis of the above discussion.