277 Puerto Rico businesses filed for bankruptcy in 2023
In Puerto Rico last year, a total of 277 businesses sought legal protection from the U.S. Bankruptcy Court, marking a 10.4% increase from the 251 cases on record for the previous year, according to a report by analysis firm Boletín de Puerto Rico.
Collectively, these financially distressed businesses amassed more than $1 billion in debt in 2023, representing a 75% jump from the debt reported by bankrupt companies in Puerto Rico in 2022. The categories with the highest number of filings were restaurants (24), construction (12), doctors (8), bakeries (6), and real estate firms (5).
In December alone, there were 438 petitions filed by both businesses and individuals, representing a 28.8% rise from the 340 cases filed in the same month in 2022.
A busy year for filings
The U.S. Bankruptcy Court was busy during 2023, with 4,435 petitions filed from January to December, which is 16.4% more than the 3,810 cases filed in 2022, according to the report.
When broken down by category, Chapter 13 cases — which allow individuals to set up a repayment plan that uses their income to gradually eliminate their debt — totaled 3,003 in 2023, up 23.6% compared to the 2,430 on record for the same 12-month period in 2022. These filings constituted 67.7% of all bankruptcy cases in Puerto Rico for the year.
There were 1,362 Chapter 7 petitions, which seek a total liquidation of assets, filed in 2023, up 3.2% from the 1,320 reported in 2022. That category accounted for 30.7% of all bankruptcy cases in Puerto Rico in 2023.
Chapter 11 cases, or those that allow businesses to continue operating while they reorganize their finances, totaled 66 in 2023, marking a 34.7% increase from the 49 petitions recorded in 2022.
Lastly, there were four Chapter 12 petitions filed in 2023 by farmers seeking the court’s protection as they restructure their finances, a 63.6% drop from the 11 cases on record for 2022, according to the bulletin.
