With more than half of 2017 still ahead, the retail industry is seeing a record-setting pace for bankruptcy filings and store closings — and more are expected in the not too distant future, despite what most consider a healthy consumer.

This tipping point for retail is the result of a number of compounding reasons, but the inability to pay looming, massive debt bills is dealing the final death blow to many.

More online shopping

Yes, more shopping is shifting online in general, and to Amazon specifically, as in-store shopping traffic and sales trends fall for many retailers and shopping centers. Slice Intelligence said 43 cents of every online dollar is spent on Amazon according to its analysis of millions of email receipts.

However, according to the latest U.S. Commerce Department retail sales data, 86 percent of all retail sales (excluding motor vehicles and parts and food service and drinking locations) are still made in physical, brick-and-mortar locations. To be sure, the online versus in-store sales breakdown varies wildly from retailer to retailer.

Less stuff, more experiences

While some shopping is shifting from stores to the web, other spending is being diverted away from physical goods, particularly, clothing.

In 2005, 3.6 percent of total U.S. retail sales went to department stores; now it’s less than 2 percent, according to government data. Retailers like Macy’s and credit card companies including MasterCard have discussed the shift in consumer spending from physical goods to experiences like travel.

Plus, for years now, Americans have been spending on bigger purchases or investments like their homes, which has paid off for Home Depot and Lowe’s. But other spending categories are also rising including health-care costs and education. Additionally, many consumers are now shelling out for smartphone data plans and subscriptions to services like Netflix — all costs that take away from other disposable spending categories.

Bankruptcy code changes

But retail’s trouble goes beyond the secular changes in consumer behavior.

Major changes were made to the bankruptcy code that went into effect in late 2005, largely shifting from more debtor-friendly to more creditor-friendly after successful lobbying attempts on behalf of creditors and in the case of retail, landlords.

Retail restructuring experts say what the changes ultimately boil down to is a lack of time to turn around a struggling business once a Chapter 11 bankruptcy filing is made. The law now allows a maximum of 210 days for retailers to inform landlords if they are going to renew leases or close doors.

Prior to 2005 changes, it was not uncommon for a retailer to be in bankruptcy for 18 months or so, but now that’s not possible. Which means, Chapter 11 is now turning into liquidation much more frequently.

“I took [grocery chain] Winn-Dixie through the restructuring process in [February] 2005. It took 16 months, but it was an ultimate success,” said Holly Etlin, AlixPartners managing director. “The bankruptcy law changes went into effect at the end of our restructuring. It likely couldn’t be done under the law today.”

Etlin is also the current chief restructuring officer at women’s apparel retailer BCBG Max Azria as it works to restructure after filing for bankruptcy on Feb. 28.

“When the law changed, it immediately had a very severe effect on the ability of retailers to reorganize” explains Lawrence Gottlieb, a bankruptcy attorney and retail sector expert at New York law firm Cooley. The firm has represented a number of creditors in the bankruptcy filings by Eddie Bauer, Filene’s Basement and Samsonite Stores, and represented some debtors, like Crabtree & Evelyn.

Gottlieb led a 2013 study of 45 retail bankruptcies,…