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Small-Business Bankruptcy Filings Up 81% in June Western U.S. Remains Hardest Hit Region August 12, 2009 (SmartPros) Commercial bankruptcies among the nation's more than 25 million small busineses increased by nearly 81% in June 2009 from June 2008, according to Equifax Inc. which analyzed its comprehensive small business database for the study. There were 10,339 bankruptcy filings in June 2009 throughout the U.S., up from 5,712 a year ago, according to the data.
California is the most negatively affected state with 10 MSA's (metropolitan statistical areas) among the 15 areas with the most commercial bankruptcy filings during June. Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas led the nation in small-business bankruptcy filings. The other MSA's with the most bankruptcy filings during the month include:
"The data shows that the economic pain is continuing for small businesses across the country," said Dr. Reza Barazesh head of North American research for Equifax's Commercial Information Solutions division. "While it may not be quite as intense in some areas as what we saw earlier this year, we're still seeing hefty increases in the number of bankruptcies in a lot of major metro areas. "
The Atlanta MSA increased to 208 bankruptcies from 93 a year ago; Houston increased to 153 from 84; and Charlotte, which wasn't even in the top 15 a year ago, had 225 bankruptcies in June, the fourth highest of any MSA. For its research, Equifax reviewed and analyzed small business data for the month of June, the most recent month for which complete data is available, and compared it with results from June 2008. Equifax defines a small business as a commercial entity of less than 100 employees. The company's report also listed the 15 metro areas with the fewest small-business bankruptcy filings. They are:
For the analysis, Equifax analyzed both Chapter 7 and Chapter 13 filings. Chapter 7 is a liquidation proceeding in which a debtor receives a discharge of all debts, while Chapter 13 is a reorganization bankruptcy enabling filers to pay off debt over a set period of years.
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