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Total commercial chapter 11 bankruptcy filings for the first calendar quarter of 2020 increased 14 percent from the same period last year, according to data provided by Epiq Systems, Inc. The 1,709 total commercial chapter 11s from January 1 through March 31, 2020, increased from the 1,500 total commercial chapter 11s during the same period in 2019. Total overall commercial bankruptcy filings also increased in the first quarter of 2020, as the 9,817 during the first three months of 2020 marked a 4 percent increase over the 9,481 total commercial filings over the same period in 2019. However, total overall bankruptcy filings decreased 5 percent over the first three months of 2020 to 177,198 from the 187,325 filings during the same period of 2019. Consumer bankruptcy filings decreased 6 percent over the first three months of 2020 to 167,381 from the 177,844 consumer filings over the same period of 2019. “The first quarter filings represent a calm before the storm of the financial distress caused by the COVID-19 pandemic,” said ABI Executive Director Amy Quackenboss. “Consumers and businesses face growing financial challenges due to the pandemic, and bankruptcy provides a vital safe harbor from their mounting debts. We anticipate business filings to start rising this month and consumer filings to start to accelerate in early summer.”

U.S. Senate Majority Leader Mitch McConnell said on Friday the U.S. Congress will work on another coronavirus relief bill, with healthcare topping the list of priorities, Reuters reported. McConnell’s comments, in an interview with the Associated Press, signaled leading Republicans were willing to join Democrats in working on what would be a fourth bill responding to the pandemic, which has taken over 6,000 lives in the United States, with over 25 percent in New York City. Infections in the United States account for about 24 percent of the more than 1 million cases worldwide. Previously McConnell had shown little interest in joining Democratic House Speaker Nancy Pelosi in working on another coronavirus measure, saying lawmakers should wait to see whether more aid is needed after the Trump administration implements the three response bills already passed by Congress, including an unprecedented $2.3 trillion package signed into law on March 27. Read more.

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- TODAY: Tools to Navigate the Financial Crisis Related to COVID-19 (Panel features Former House Speaker John Boehner!)

- Tuesday: The Consumer Provisions of the CARES ACT, and Local Court Responses to the Pandemic

- Wednesday: Preference Update: SBRA’s Due Diligence Requirement

Bankruptcy experts agree that the financial distress resulting from the COVID-19 pandemic will push more struggling consumers to look at the fresh start of bankruptcy, remembering how the Great Recession caused a wave of bankruptcy cases from consumers seeking a reset after getting too far behind on debt, MarketWatch.com reported. “We think business filings will see an uptick in April with consumer filings to surge in May and June,” said ABI Executive Director Amy Quackenboss. The increase could take a bit longer because in times of crisis, “people don’t normally race off to file bankruptcy,” said John Rao, a National Consumer Law Center staff attorney specializing in consumer bankruptcy. Still, “there is no question that given the effect of this pandemic, there will be an increase of bankruptcies. It’s really a question of when that rise will occur.” There were more than 770,000 bankruptcies filed last year, according to the organization. That’s less than half of the nearly 1.6 million cases filed in 2010 during the Great Recession. In fact, bankruptcy filings hit a 10-year low in 2018. But while bankruptcy filings have dropped in recent years, household debt has climbed. Americans had $14.15 trillion in household debt as of 2019’s fourth quarter, according to Federal Reserve Bank of New York data. For context, the recession-era peak was $12.68 trillion during the third quarter of 2008. Read more.

In related news, lawyers and advisers who work on the largest corporate bankruptcies in the U.S. say that they expect a deluge of debt restructurings and chapter 11 filings due to the massive disruption caused by the novel coronavirus, WSJ Pro Bankruptcy reported. They have been inundated in recent days by calls and emails from lenders about cash-strapped companies drawing down loans and fielding inquiries about whether their clients can get money under the $2 trillion emergency stimulus package. When this predicted surge in bankruptcies will hit — whether it will be weeks or months from now — is anyone’s guess. But given the breadth of the disruption, bankruptcies are expected in many corners of the economy. “What makes the present crisis in many ways more odious than the last one is that it affects everyone,” said James Peck, a former bankruptcy judge who oversaw the chapter 11 case for Lehman Brothers when it collapsed in 2008. “It affects consumers and it affects people where they live. Nobody can escape and there’s no place to hide.” The spike hasn’t caused an immediate jump in corporate bankruptcies, which require financing and — absent an emergency — usually take weeks or months to prepare. Nationwide there have been more than 1,600 chapter 11 filings through March 20 of this year, about 200 more cases than were filed through the end of March of last year, according to data firm BankruptcyData. Read more.

Don’t forget to register for these important abiLIVE webinars:

- Today: The Small Business Reorganization Act: How It Helps in Today’s Health & Economic Crisis

- Monday: Tools to Navigate the Financial Crisis Related to COVID-19 (Featuring Former House Speaker John Boehner!)

- Tuesday: The Consumer Provisions of the CARES ACT, and Local Court Responses to the Pandemic

- Wednesday: Preference Update: SBRA’s Due Diligence Requirement