January U.S. bankruptcies down 44% versus a year ago: Epiq

WASHINGTON (Reuters) - U.S. bankruptcy filings continued their surprising decline in January, dropping 6% compared to the month before and 44% compared to January 2020, legal services firm Epiq reported on Thursday.

The 32,298 bankruptcies filed in January across both commercial and non-commercial cases was the lowest since Feb. 2006, Epiq reported.

The onset of the coronavirus pandemic sparked concern that waves of businesses and households would be driven into bankruptcy as health restrictions halted commerce and threw millions out of work.

While some categories of commercial bankruptcy did increase in recent months, the overall trend was in the other direction as federal pandemic relief programs kept companies and families afloat.

That continues, as does optimism about further fiscal aid from the Biden administration and now a possible end to the pandemic from vaccinations, said Chris Kruse, senior vice president of Epiq AACER.

“We continue to expect new filings to grow substantially in the second-half of 2021,” Kruse said in press release. But “we appear to be suspended in an air bubble at the moment...The optimism around a new political administration and potential new government relief for consumers has kept new filings historically low.”

Reporting by Howard Schneider; Editing by Chizu Nomiyama and Sonya Hepinstall