Despite the challenges of COVID-19 and inclement weather, rising commodity prices and government support ultimately reversed the trend of the year-over-year increase in Chapter 12 bankruptcies.
The American Farm Bureau looked at U.S. court data from June 2020 through June 2021 and found that there were 438 Chapter 12 bankruptcy filings, down 24%. The number of Chapter 12 filings in the past 12 months is the lowest since 2015.
The decrease in bankruptcy filings is a notable change given the large number of bankruptcies over the previous three years.
The Southwestern United States saw the largest increase in the number of Chapter 12 filings in total number and percentage. Deposits increased in three of the six states, including Colorado, Oklahoma, and New Mexico. Deposits also increased in the northeastern United States. Four regions across the country had better news, with double-digit declines in the number of Chapter 12 filings in total numbers and percentages.
The Southeast had 54 less Chapter 12 depots; a decrease of 44 percent from the previous year. The Midwest, which dominates all regions with a filing count of 235, still recorded 61 fewer Chapter 12 bankruptcies last year, down 21% from the previous year.