The island’s bankruptcy rate held on to its seventh consecutive monthly decline in October, when a total of 1,077 cases were submitted to the U.S. Bankruptcy Court. The figure represents 90 fewer filings and an 8.35 percent drop in comparison to the same month last year, research firm Boletín de Puerto Rico reported.
For the first 10 months of the year, some 9,546 petitions were filed, reflecting a 7.59 percent drop from the same period in 2010, when 10,331 bankruptcy cases were submitted.
Of the four types of bankruptcy categories, Boletín de Puerto Rico said Chapter 13, or personal bankruptcies and Chapter 7, or total liquidation, showed drops of 9.2 percent and 5.7 percent, respectively. On the flip side, Chapter 11 and 12 petitions — the first allows petitioners to continue operating their businesses, while the second is for farming operations only — increased by 9.2 percent and 5.7 percent, respectively.
As per the report, farmers have been hit hard this year, with a total of 24 dairy farms filing for protection from the court — a sharp 500 percent increase from the four cases on record for the same period in 2010.
In terms of the debt associated with the bankruptcy filings, Boletín de Puerto Rico calculated the figure at nearly $2.3 billion for the month of October, or an 11.1 percent increase from the same month last year. While unsecured debt dropped by 6.8 percent, secured debt increased by a whopping 33.4 percent.
“The reason for this increase in reported debt is the filings by developers and construction companies; 36 percent of the commercial debt corresponds to this sector and for 22 percent of the total debt,” Boletín de Puerto Rico said. “Twenty eight percent of the debt corresponds to the 15 largest commercial filings.”
Restaurants followed by construction contractors and medical doctors head the list of commercial bankruptcy petitions.