By The Star Staff
Puerto Rico had 990 local court bankruptcy petitions filed between January and March, representing a 2.8% year-over-year (YoY) increase from the same period in 2022, according to a Boletin de Puerto Rico report.
Between January and March 2022, some 963 island residents and businesses filed bankruptcy petitions, the report stated. From January to March of this year, 670 cases were filed under Chapter 13, while 305 cases were filed under Chapter 7. A total of 13 Chapter 11 cases were filed between January and March, 85.7% more than the seven filed during the same time frame in 2022, according to the report.
A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. The biggest difference between Chapter 7 and Chapter 13 is that Chapter 7 focuses on discharging (getting rid of) unsecured debt such as credit cards, personal loans and medical bills, while Chapter 13 allows you to catch up on secured debts like your home or your car while also discharging unsecured debt. Chapter 11 bankruptcy allows business entities and individuals with large amounts of debt to reorganize their financial affairs.
The document showed that total debt in bankruptcy filings for the first quarter of 2023 amounted to nearly $106.6 million, 0.93% less than the $107.6 million recorded during the same three-month period of 2022. Of the approximately $106.6 million in the January-March period, about $52.5 million was secured debt and $50.2 million was unsecured debt. According to the report, about $3.9 million was classified as senior debt.