Puerto Rico’s bankruptcy filings up a whopping 43% in February
The number of bankruptcy filings in Puerto Rico surged in February, with 455 cases recorded, marking a 42.6% increase from the same month last year, according to an analysis by research firm Boletín de Puerto Rico.
The report shows that 319 cases petitioning U.S. Bankruptcy Court protection were filed in February 2023.
So far this year, 828 cases have been filed across all bankruptcy categories, representing a 378% jump compared to the same two-month period in 2023, the analysis shows.
When broken down, this year has seen 551 filings under Chapter 13, which by the U.S. Court’s definition “provides for adjustment of debts of an individual with regular income. Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.”
The total represents a 34.7% increase from the 409 petitions on file for the January-February period in 2023.
There have been 265 Chapter 7 cases filed by individuals so far this year, which provide for “liquidation, or the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors,” as defined by the U.S. courts.
That figure represents a 47.2% year-over-year rise, compared to the 180 petitions filed in January-February last year.
However, Chapter 11 filings decreased by 10% year-over-year, with nine cases on record, compared to 10 filed in the same year-ago period. Chapter 11 protection “generally provides for reorganization, usually involving a corporation or partnership. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in Chapter 11,” the U.S. Court’s definition states.
A fourth category, Chapter 12 – which “provides adjustment of debts of a ‘family farmer,’ or a ‘family fisherman’ with regular annual income to propose and carry out a plan to repay all or part of their debts” – saw three filings in Puerto Rico in January and February, up 50% from the two cases in the same period of 2023.
The five largest bankruptcy petitions so far this year included businesses and professional services from the restaurant, medical, construction, aluminum windows and doors, and hardware store sectors. They had a combined debt of about $10 million.
