Despite challenges from COVID-19 and bad weather, higher commodity prices and government support have finally turned the tide around on year-over-year increases in Chapter 12 bankruptcies.
The American Farm Bureau looked at data from the U.S. Courts from June 2020 through June 2021 and found there were 438 Chapter 12 bankruptcy filings, down 24 percent. The number of Chapter 12 filings over the previous 12 months is the lowest level since 2015.
The decrease in bankruptcy filings is a noteworthy shift considering the significant number of bankruptcies during the previous three years.
The Southwest U.S. saw the largest increase in the number of Chapter 12 filings by total numbers and by percentage. Filings increased in three of the six states, including Colorado, Oklahoma, and New Mexico. Filings also increased in the Northeast U.S. Four regions of the country had better news, with double-digit drops in the number of Chapter 12 filings by total numbers and by percentages.
The Southeast had 54 fewer Chapter 12 filings; a 44 percent drop from the prior year. The Midwest, which leads all regions with their number of filings at 235, still had 61 fewer Chapter 12 bankruptcies in the past year, down 21 percent from the previous year.