The U.S. Bankruptcy Court for the District of Puerto Rico received 3,160 petitions from January to May, when filings were up 1.1% in comparison to the same five-month period in 2018, according to information provided by local research firm Boletín de Puerto Rico.
When broken down into categories, about 1,882 of those petitions were from individuals seeking Chapter 13 protection to reorganize their finances under the court’s supervision.
Chapter 13 is a form of debt consolidation that requires petitioners to follow and stick to a payment plan. The filings represented a 12% increase when compared to the same period in 2018.
Next were Chapter 7 petitions, of which there were 1,230 filed seeking total liquidation of assets. The number for the January-May period represents an 11.6% reduction when compared to the same period in 2018, when 1,392 petitions had been filed.
Chapter 7 is the most common form of bankruptcy in the United States and applies to both individuals and businesses.
Meanwhile, the research firm noted that during the first five months of 2019, there were 42 Chapter 11 petitions filed, or 19.2% less than the number on record for the same period last year.
Chapter 11 protection is available for both businesses and individuals wishing to reorganize their finances. This type of filing is mostly sought by businesses, as they are able to continue operating as they go through the bankruptcy.
There were six Chapter 12 cases filed through May by farmers, which are the only eligible parties under this special protection. The number represents a whopping 200% increase when compared to the same five-month period last year.
For the month of May, the U.S. Bankruptcy Court received 706 petitions, representing a 1.40% drop in comparison to May 2018, Boletín de Puerto Rico revealed.