Puerto Rico bankruptcies up 3.5% in March, but down 9% during 1Q22
The number of bankruptcy filings for the month of March was up 3.5% with 414 cases on record, compared to the 400 petitions for the same month in 2021, research firm Boletín de Puerto Rico revealed.
But for the first quarter of the year — January to March — that total number was down 9%, with 963 cases filed in 2022, versus the 1,058 filings for the same period in 2021.
When broken down, the report shows that 62%, or 597 of the accrued filings, fall under the Chapter 13 category, which enables individuals with regular income to develop a plan to repay all or part of their debts, according to the definition of the US Bankruptcy Court.
Meanwhile, Chapter 7 filings, which the court said, “provide for liquidation, or the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors,” represented 37% of the cases filed during the quarter, with 356 petitions on record, Boletín de Puerto Rico stated.
The report shows that during the first quarter of the year, seven petitions were filed under the Chapter 11 category, which is commonly known as a reorganization that allows the business to continue operating while it works out its financial problems. That number represents a 30% drop when compared to the same year-ago quarter.
Finally, there were three petitions filed under the Chapter 12 classification that applies specifically to farms and fisheries and enables them to keep their assets while reorganizing their debts. The current filings represent a 50% jump from the petitions filed during the first quarter of 2021.
During the first three months of 2022, a total of 56 businesses sought protection from the US Bankruptcy Court. That number is up 19% from the 47 such filings on record for the same quarter in 2021, Boletín de Puerto Rico informed.