There is good news in the world of business — bankruptcy filings are down. After years of sluggish economic conditions after the recession of 2008, there is reason to believe that the worst is behind us, as new research shows that bankruptcy filings are far lower now than they were at this time in 2014.
According to New Generation Research, which just filed its Quarterly Report of Business Bankruptcy Filings for the first quarter of 2015, bankruptcy filings are currently the lowest since 2006. This news is part of an overarching trend downward of bankruptcies that began last year. The latest numbers are 3 percent lower than the last quarter of 2014 and 19 percent lower than the first quarter of 2014. This represents a significant shift in the right direction for businesses across the U.S.
Bankruptcy and Small Business
Although overall bankruptcies are down, there are still many companies facing tough financial conditions. On the whole, smaller businesses are far more vulnerable to these issues and are far more likely to file for bankruptcy than larger firms. Nearly 80 percent of all bankruptcy filings in the first quarter of 2015 were by small businesses —those with $2.5 million or less in gross annual sales.
In terms of pure geography, California, Illinois and Texas generated the highest number of total business bankruptcies. This was in part due to the size of these states and the high number of businesses incorporated within them.
For businesses dealing with large amount of debt, bankruptcy can be a good strategic move, but it is best to understand the rules and implications of bankruptcy before moving ahead. To learn more about filing for bankruptcy in California, speak with Max Gardner, a knowledgeable Bakersfield bankruptcy attorney at 661-888-4335.
