Yes, bankruptcies are increasing. U.S. bankruptcy filings have risen for three consecutive years, reaching 574,314 in the twelve months ending December 31, 2025, an 11 percent jump over the prior year.1United States Courts. Bankruptcy Filings Rise 11 Percent Growth has slowed from the 16.2 percent surge recorded in mid-2024, but the raw volume keeps climbing, and total filings now sit roughly 40 percent above pandemic-era lows.
How Fast Filings Are Rising
Line up the recent reporting periods and the direction is unmistakable. For the year ending June 2024, federal courts counted 486,613 filings, up 16.2 percent from 418,724 the year before.2United States Courts. Bankruptcy Filings Rise 16.2 Percent By September 2024, the twelve-month total had reached 504,112.3United States Courts. Bankruptcy Filings Rise 16.2 Percent Calendar year 2024 closed at 517,308, a 14.2 percent increase over 2023.4United States Courts. Bankruptcy Filings Rise 14.2 Percent The year ending December 2025 pushed the count to 574,314 across all 94 federal judicial districts.
The year-over-year growth rate is decelerating. The absolute numbers are not. Courts processed roughly 57,000 more cases in 2025 than in 2024. Even at the slower pace, the total still sits below the peaks that followed the 2008 financial crisis, so there is room above the current line.
Which Bankruptcy Chapters Are Driving the Increase
The growth is lopsided, and that imbalance matters. The chapter-level numbers for the year ending September 30, 2025, show where the pressure is concentrated:5United States Courts. Bankruptcy Filings Increase 10.6 Percent
- Chapter 7 liquidation filings reached 344,825, up 15.5 percent from 298,644 the year before. This is the fastest-growing chapter by a wide margin. Chapter 7 wipes out most unsecured debts in exchange for surrendering non-exempt assets, and discharge typically comes about four months after filing. The court filing fee is $338.6United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
- Chapter 13 repayment-plan filings reached 203,118, up a much milder 3.6 percent from 195,971. Chapter 13 lets filers keep property while repaying debts over three to five years, with the plan length tied to whether income is above or below the state median. The filing fee is $313.7United States Courts. Chapter 13 – Bankruptcy Basics
- Chapter 11 business reorganization filings came in at 8,937, essentially flat against 9,012 the previous year.
The split between Chapter 7 and Chapter 13 tells its own story. When filers choose liquidation over a structured payoff, it usually means income is too low to sustain a three-to-five-year repayment plan, or that debts have grown so large relative to assets that a clean slate is the only realistic exit. The stalled growth in Chapter 13 points the same direction: fewer households have the steady income needed to commit to a multi-year schedule.
Small businesses with debts up to $3,024,725 can file under Subchapter V, a streamlined Chapter 11 track that skips some of the most costly steps of traditional reorganization; a temporary pandemic-era increase to $7.5 million in eligible debt expired in June 2024.8Department of Justice: U.S. Trustee Program. Subchapter V Small Business Reorganizations
Consumers Are Driving the Current Wave
Of the 574,314 cases filed in the year ending December 2025, 549,577 were non-business filings and only 24,737 were business filings.1United States Courts. Bankruptcy Filings Rise 11 Percent Consumer filings rose 11.2 percent. Business filings grew 7.1 percent.
That 7.1 percent represents a sharp deceleration. In the year ending September 2024, business filings had spiked 33.5 percent, climbing from 17,051 to 22,762.3United States Courts. Bankruptcy Filings Rise 16.2 Percent By calendar 2024, the rate had slowed to 22.1 percent.4United States Courts. Bankruptcy Filings Rise 14.2 Percent The initial wave of corporate distress appears to have crested while individual financial strain keeps building. Medical bills, credit card balances, and auto loan obligations are the everyday liabilities pushing households into court.
What’s Pushing Filings Higher
Several forces are converging, and none are fading quickly.
Interest Rates Still Weigh on Household Budgets
The Federal Reserve’s benchmark rate sat at 3.5 to 3.75 percent as of January 2026, down from the peaks of the recent tightening cycle but still well above the near-zero rates that prevailed for most of the 2010s. Anyone carrying variable-rate credit card balances, adjustable-rate mortgages, or floating-rate business loans has been absorbing significantly higher monthly payments for over two years. Three rate cuts in late 2025 offered some relief, but the cumulative damage to household budgets had already been done.
Household Debt at Record Levels
Total household debt hit $18.8 trillion in the fourth quarter of 2025. Credit card balances alone reached $1.28 trillion. Auto loans stood at $1.67 trillion.9Federal Reserve Bank of New York. Household Debt and Credit Report Credit card balances grew $44 billion in a single quarter. When debt loads are that high and higher interest rates make minimum payments more expensive, the margin for error in a household budget shrinks to almost nothing.
Credit Card Delinquency Is Back at 2008 Levels
The share of credit card debt 90 or more days past due has reached levels not seen since the 2008 financial crisis.10Federal Reserve Bank of St. Louis. The Broad, Continuing Rise in Delinquent U.S. Credit Card Debt Revisited In lower-income areas, the 90-day delinquency rate climbed to 20.1 percent by early 2025. Even the highest-income zip codes saw their delinquency rates jump roughly 80 percent from their 2022 lows. The flow rate into serious delinquency nationally stood at 7.13 percent as of the fourth quarter of 2025.11Federal Reserve Bank of New York. Household Debt Balances Grow Modestly; Early Delinquencies Level Out for Non-Housing Debts Serious delinquency is the last stop before charge-offs and collections, both of which feed directly into bankruptcy filings.
Pandemic Relief Programs Have All Expired
Stimulus checks, expanded unemployment benefits, student loan payment pauses, foreclosure moratoriums, and eviction protections all suppressed bankruptcy filings between 2020 and 2022 to historically low levels. As each program expired, the artificial floor under household finances disappeared. Part of what the current filing numbers reflect is delayed normalization: debt problems that were held in suspension working their way into court.
Where Filings Are Rising Fastest
The increase is not evenly distributed. The Ninth Circuit, which covers the western United States from the Pacific coast through several mountain states, reported filings up 25.6 percent for the year ending in the 2024 fiscal period, well above the national average of 16.2 percent.12United States Courts for the Ninth Circuit. 2024 Annual Report Southeastern circuits have also consistently reported high filing volumes, with local housing market pressures and cost-of-living increases outpacing wage growth. No region of the country is showing a decline.
If the Trend Is Pushing You to Consider Filing
Rising filings do not mean bankruptcy is the right move for every borrower under pressure, and two threshold questions decide whether it will do what you want it to do.
First, bankruptcy does not erase every debt. Federal law carves out categories that survive a discharge no matter which chapter you file under.13Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge Child support and alimony always survive. Student loans are not dischargeable unless you can show “undue hardship,” a standard fewer than one percent of borrowers who tried had met as of 2025. Recent federal income taxes generally cannot be discharged if the return was filed late and less than two years before the petition, or if no return was filed.14Internal Revenue Service. Publication 908, Bankruptcy Tax Guide Debts from fraud are excluded, as are luxury purchases above $500 made within 90 days of filing and cash advances over $750 taken within 70 days. DUI-related injury liability, criminal restitution, and government fines also survive. If most of what you owe falls in these categories, filing may cost time and money without meaningfully reducing your obligations.
Second, not every filer qualifies for Chapter 7. Federal law requires individuals to pass a means test comparing household income against the median for a family of the same size in their state. Below the median, you qualify. Above it, you may be directed into Chapter 13 instead, though allowable expenses calculated under IRS standards can still bring your disposable income low enough to pass. The U.S. Trustee Program updates the median income thresholds twice a year, in April and November. Attorney fees run roughly $800 to $2,700 for a standard Chapter 7 case on top of the $338 court filing fee, with Chapter 13 fees typically higher because the lawyer’s work extends across the full repayment period.
The direction of the numbers is clear. Whether filing makes sense for any single household depends on the composition of the debts, the income side of the means test, and the state-level exemption rules that determine what property stays with the filer.