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Quarterly Bankruptcy Trends: Chapter 7 vs. Chapter 13 Filing Patterns
Bankruptcy filing volumes have shifted meaningfully over the past 12 months. We examine current trends in Chapter 7 and Chapter 13 filings and share practical guidance for credit unions managing member bankruptcy matters.
Current Filing Environment
Bankruptcy filings have trended upward over the past year as pandemic-era relief programs wound down and consumer debt loads increased. Credit unions should expect to see increased activity in their bankruptcy portfolios.
Chapter 7 Considerations
Chapter 7 filings remain the most common bankruptcy type. For credit unions, the key considerations include:
Timely filing of proofs of claim
Monitoring for potential preferential transfers
Evaluating reaffirmation agreement requests
Coordinating with the trustee on collateral
Chapter 13 Update
Chapter 13 plan durations (typically 3-5 years) mean that credit union exposure can be prolonged. Active monitoring of plan payments and quick action when debtors fall behind on plan payments is essential.
Best Practices
Maintain current vendor relationships — Ensure your bankruptcy counsel has current contact information and loan data.
Automate alerts — Set up systems to flag new bankruptcy filings by members.
Review reaffirmation policies — Make sure your policy on reaffirmation agreements reflects current legal standards and your risk tolerance.
Contact our team to discuss your credit union's bankruptcy management strategy.