The 629 bankruptcy cases filed in Puerto Rico in September were 4.84% lower than those on record for the same month last year, while the 5,690 petitions submitted to the U.S. Bankruptcy Court during the first nine months of this year were down by 1.3% vs. the same year-ago period, a local research firm revealed.
Data compiled by Boletín de Puerto Rico shows that the majority of the 3,457 cases filed from January to September were submitted under the Chapter 13 category, which gives individuals the chance to reorganize their finances.
Coming in second were 2,160 Chapter 7 cases seeking total liquidation submitted during the nine-month period. That total represents a 13.5% year-over-year drop, Boletín de Puerto Rico confirmed.
“Chapter 7 in the bankruptcy code allows both individuals, corporations, or self-owned businesses to settle their debts. Simply put, it means total bankruptcy,” Boletín de Puerto Rico explained.
“The bankruptcy court designates a trustee who is responsible for liquidating the assets so that the debtor obtains a discharge,” the firm said, adding that it reports percentage data comparing the total bankruptcies filed against Chapters 7 filings in response to concerns from its own clients.
There are 63 Chapter 11 filings on record through September from businesses that are seeking to reorganize their finances through this type of protection. The figure is 25.9% lower than the number of petitions on record for the same nine-month period in 2018.
Meanwhile, nine farming operations filed for Chapter 12 protection — a category that is reserved exclusively for troubled agriculture businesses — during the January-September period.