Bankruptcy Filings Statistics in US 2026 | Key Facts

Bankruptcy Filings in the US 2026

Bankruptcy filings across the United States have experienced a remarkable resurgence in 2025 and continuing into 2026, reversing more than a decade of steady decline. According to the Administrative Office of the U.S. Courts and Epiq AACER bankruptcy analytics platform, total bankruptcy filings reached approximately 565,759 cases in calendar year 2025, representing an 11% increase from the 508,953 cases filed in 2024. Consumer bankruptcy filings specifically jumped 12% from 478,752 in 2024 to 533,949 in 2025, marking the most significant annual increase since the economic recovery following the Great Recession. This upward trajectory signals widespread financial distress among American consumers and businesses, though current levels remain substantially below the historic peaks witnessed during the 2008-2010 period when annual filings regularly exceeded 1 million cases.

The increase in bankruptcy filings is not a sudden crisis but rather a normalization process following years of artificially suppressed filing rates during the COVID-19 pandemic. From 2020 through 2022, government stimulus payments, enhanced unemployment benefits, student loan payment moratoriums, eviction protections, and forbearance plans provided temporary financial relief that delayed many Americans’ need to seek bankruptcy protection. As these safety nets disappeared in 2023 and 2024, individuals and businesses facing insurmountable debt loads turned to the federal bankruptcy system in growing numbers. Experts emphasize that Americans typically hold off on filing for bankruptcy as long as possible, meaning the conditions that led them to file may not necessarily be tied to current economic issues but rather reflect a lag period. The rising cost of medical insurance, mounting credit card debt reaching $1.233 trillion nationally, the restart of student loan repayments, and persistent inflation have emerged as the major catalysts driving bankruptcy filings in 2025 and 2026.

Interesting Stats & Facts About Bankruptcy Filings in the US 2026

Data compiled from Administrative Office of the U.S. Courts (2025), American Bankruptcy Institute (2025), Epiq AACER Bankruptcy Analytics (2025), CBS News Analysis (January 2026), and BankruptcyWatch Weekly Reports (2025)

The bankruptcy filings statistics for 2025 reveal several critical trends that extend into 2026. Consumer bankruptcies represent the overwhelming majority at 94.4% of all filings, with 533,949 individual Americans seeking protection from creditors during the year. This 12% jump from the previous year’s 478,752 cases indicates growing financial strain across American households. Commercial or business bankruptcies, while smaller in absolute numbers at 31,810 cases, also increased by 5% year-over-year, affecting national and regional retailers including Forever 21, Joann Fabrics, and most notably Saks Global, which filed for Chapter 11 protection in December 2025.

The breakdown by bankruptcy chapter provides additional insight into how Americans are addressing their debts. Chapter 7 bankruptcies, which allow for liquidation of assets and discharge of most unsecured debts, saw the largest increase with 332,706 filings in 2025, up 15% from the prior year. This suggests many filers lack sufficient disposable income to repay creditors under a structured plan. Chapter 13 filings, which establish 3-5 year repayment plans for debtors with regular income, totaled 200,055 cases in 2025, representing a more modest 6% increase. For businesses, Chapter 11 reorganization filings reached 7,940 cases, up just 1%, driven primarily by higher interest rates in 2023-2024 and persistent inflation that squeezed profit margins. The monthly data from December 2025 showing 45,935 filings—a 20% increase over December 2024—suggests the upward trend is accelerating as 2026 begins.

Consumer Bankruptcy Trends and Patterns in the US 2026

Data compiled from Epiq AACER (2024-2025), Consumer Bankruptcy Project Research (2019-2025), CBS News (January 2026), Bankrate Credit Card Debt Report (2025), and Federal Reserve Economic Well-Being Survey (2024-2025)

Consumer bankruptcy patterns in 2025 and 2026 reveal that financial distress continues to strike hardest at working-age Americans in their peak expense years. The average bankruptcy filer is 44.9 years old, typically carrying a mortgage, raising children, managing auto loans, and facing unexpected medical expenses—all while earning between $35,000 and $70,000 annually, which falls below the national median household income of approximately $75,000. This income level places filers above the poverty line but well short of what’s needed to maintain financial security when emergencies arise. The biggest issue for bankruptcy filers is not income level per se, but rather debt burden: they tend to be overwhelmed with credit cards, auto loans, mortgages, student loans, payday loans, and medical debts that compound faster than they can repay.

The role of medical debt in driving bankruptcies cannot be overstated. Research consistently shows that 60% to 66.5% of personal bankruptcies are tied to medical expenses, either directly through unpaid medical bills or indirectly through income loss due to illness or injury. In a typical scenario, a medical emergency generates a $25,000 hospital bill that insurance barely covers, leaving the patient with thousands in out-of-pocket costs. Combined with missed work during recovery, this creates a financial cascade: credit cards max out paying medical bills, mortgage or rent payments fall behind, debt collectors begin calling, and eventually legal action like wage garnishment or bank account levies forces the debtor into bankruptcy. Approximately 50% of households entering bankruptcy are already facing legal action including foreclosure, vehicle repossession, or garnishment, while 77% cite aggressive debt collection as a contributor to their filing decision. The 12% increase in consumer filings from 2024 to 2025 reflects these mounting pressures, with Chapter 7 liquidation rising faster (+15%) than Chapter 13 repayment plans (+6%), indicating many Americans simply lack the income to propose credible repayment arrangements.

Medical Debt Impact on Bankruptcy Filings in the US 2026

Data compiled from Consumer Bankruptcy Project (2019-2024), Kaiser Family Foundation (2024-2025), Lown Institute Medical Debt Report (June 2025), CBS News Medical Debt Analysis (2024), Health Affairs Scholar (2024), RetireGuide Bankruptcy Statistics (2025), and Cornell ILR Medical Debt Study (2024)

Medical debt stands as the single largest driver of personal bankruptcy in the United States, affecting hundreds of thousands of families annually. Studies spanning multiple decades consistently find that 60% to 66.5% of Americans who file for bankruptcy cite medical bills as the primary or contributing cause, translating to approximately 550,000 people each year who seek bankruptcy protection largely because of healthcare costs. This phenomenon is virtually unique to the United States—medical bankruptcy is almost unheard of in other developed economies with universal healthcare or single-payer systems. The classification of “medical bankruptcy” typically includes cases where individuals mortgaged their homes to pay medical bills, accumulated medical debts exceeding $1,000, or lost at least two weeks of work due to illness or injury.

The scope of medical debt in America is staggering. As of 2024, approximately 36% of US households carry some form of medical debt, representing between 21 million and 108 million adults depending on the measurement methodology. Of these, 21% have past-due medical bills actively in collections, while 23% are making payment arrangements with providers or paying medical bills over time. The total estimated medical debt in the United States ranges from $88 billion to $220 billion as of 2021, though precise figures remain elusive due to fragmented reporting. For 5% of Americans with medical debt, the burden exceeds $100,000—truly catastrophic amounts that virtually guarantee bankruptcy absent debt forgiveness. Perhaps most troubling, 32% of Americans carrying medical debt believe they will never be able to pay it off completely, creating a permanent financial underclass.

The pathway from medical emergency to bankruptcy follows a predictable pattern. An unexpected health crisis generates hospital bills, physician fees, prescription costs, and laboratory charges that can easily reach $50,000 or more for a serious condition. Even with insurance, high deductibles (often $5,000-$10,000 annually), copayments, and non-covered services leave patients owing tens of thousands out-of-pocket. Missing work during illness compounds the problem by reducing income precisely when expenses spike. Unable to pay medical bills immediately, patients put charges on credit cards with 20%+ interest rates, rapidly accumulating additional debt. When payments fall behind, medical providers send accounts to collection agencies, which aggressively pursue debtors through phone calls, letters, and eventually legal action. Wage garnishment and bank account levies push families over the edge financially. For 17% of adults with healthcare debt, this cascade results in declaring bankruptcy or losing their home through foreclosure.

Credit Card Debt and Financial Strain in the US 2026

Data compiled from Federal Reserve Bank of New York (Q2-Q3 2025), LendingTree Credit Card Debt Study (2025), Bankrate Credit Card Debt Report (2025), WalletHub Credit Card Debt Analysis (2025-2026), St. Louis Fed Delinquency Research (May 2025), and Futuramo Consumer Finance Trends (2026)

Credit card debt has reached unprecedented levels in 2025, creating substantial financial pressure that contributes to rising bankruptcy rates. Americans collectively owe $1.233 trillion on credit cards as of the third quarter of 2025, the highest balance recorded since the Federal Reserve Bank of New York began tracking this data in 1999. This represents a 60% increase from the pandemic-era trough of $770 billion in early 2021, compressed into just four years of rapid accumulation. The average household now carries $7,886 to $11,227 in credit card debt depending on the calculation methodology, with significant variation by state—Connecticut residents hold the highest average at over $9,000, while Mississippi residents have the lowest.

The rapid accumulation of credit card debt reflects several converging factors. Persistent inflation throughout 2023-2025 increased the cost of groceries, gasoline, utilities, and other necessities, forcing many households to bridge the gap with credit cards. Interest rates on credit cards reached 21.39% on average in Q3 2025, the highest level ever recorded, meaning balances compound at devastating rates for those unable to pay in full each month. Approximately 46-47% of American credit card holders carry a balance from month to month, with 23% admitting they have no clear plan for repayment. This creates a vicious cycle: mounting balances generate higher minimum payments, leaving less money for essentials, which drives additional credit card use, further increasing the debt load.

Delinquency rates signal growing distress. As of 2025, 6.93% of credit card balances have transitioned to delinquency over the past year, meaning cardholders have fallen behind on payments. The share of Americans 30 days or more delinquent on credit cards has trended upward since mid-2021, with the lowest-income ZIP codes experiencing a 63% relative increase in delinquency rates. Even the highest-income 10% of ZIP codes saw delinquency rates climb 73% in relative terms from 4.8% in Q2 2022 to 8.3% in Q1 2025. For accounts 90+ days delinquent—indicating severe financial distress—rates increased by at least 40.6% across all income geographies since 2021. Banks are writing off 3.92% of credit card debt as uncollectible, representing billions in losses that reflect borrowers’ inability to repay. Combined with the $1.233 trillion in total credit card debt, these delinquency and charge-off rates point directly to the 12% increase in consumer bankruptcy filings from 2024 to 2025.

Student Loan Debt and Bankruptcy Connection in the US 2026

Data compiled from Fresh-start.law Bankruptcy Analysis (2025), Federal Student Aid Data (2024-2025), National Consumer Law Center Reports (2024-2025), CBS News Bankruptcy Coverage (January 2026), and Consumer Bankruptcy Project Research (2019-2025)

Student loan debt represents a $1.7 trillion burden on American households, making it the second-largest category of consumer debt after mortgages. While student loans are notoriously difficult to discharge in bankruptcy—requiring a separate adversary proceeding and proof of “undue hardship” that few filers can meet—they nonetheless contribute significantly to overall financial strain that drives bankruptcy filings. The average graduate carries $37,000 to $50,000 in student loan debt, translating to monthly payments of $200 to $500 or more depending on interest rates and repayment plans. These payments compete directly with housing costs, food, healthcare, and other necessities in household budgets.

The restart of student loan payments in October 2023 after a three-year pandemic moratorium added substantial pressure to borrowers’ finances. Millions of Americans who had enjoyed payment relief since March 2020 suddenly faced resuming $200-$500 monthly obligations, often with limited time to adjust their budgets. For borrowers already carrying credit card debt, medical bills, auto loans, and mortgages, the additional student loan payments created insurmountable financial strain. While income-driven repayment plans and temporary forbearances offer some relief, they don’t eliminate the debt and often extend repayment timelines to 20-25 years, during which interest continues accruing.

Student loans interact with bankruptcy in complex ways. Although difficult to discharge directly, they appear frequently in bankruptcy filings as a contributing factor. A borrower might file Chapter 7 bankruptcy to eliminate credit card debt, medical bills, and other unsecured obligations, thereby freeing up cash flow to resume student loan payments that had been impossible to maintain while juggling other debts. In Chapter 13 bankruptcies, student loans are generally non-dischargeable, meaning they must be paid in full even after the 3-5 year repayment plan concludes. The 12% increase in consumer bankruptcy filings from 2024 to 2025 reflects, in part, borrowers seeking relief from the constellation of debts—credit cards, medical bills, personal loans—that accumulated while they were already burdened by student loan obligations. As 2026 progresses, the combination of student loan payments, record credit card debt, elevated medical costs, and high interest rates continues pushing Americans toward bankruptcy protection.

Commercial Bankruptcy and Business Filings in the US 2026

Data compiled from Epiq AACER (2024-2025), American Bankruptcy Institute (2025), CBS News Commercial Bankruptcy Analysis (January 2026), Becker’s Hospital Review (2025), and Polsinelli Law Firm Bankruptcy Report (2025)

Commercial bankruptcy filings increased 5% from 2024 to 2025, reaching 31,810 cases as businesses struggled with elevated interest rates, persistent inflation, rising labor costs, and shifting consumer spending patterns. While this increase is more modest than the 12% jump in consumer filings, it nonetheless represents significant distress across American businesses, particularly in retail and healthcare sectors. Chapter 11 reorganization filings, which allow companies to restructure their finances while continuing operations, rose just 1% to 7,940 cases in 2025. However, Subchapter V filings—a streamlined Chapter 11 process created for small businesses with debts under $7.5 million—surged 11% to 2,446 elections, indicating particular strain among smaller enterprises.

High-profile commercial bankruptcies in 2025 included national and regional retailers such as Forever 21, which filed despite previous restructuring efforts, and Joann Fabrics, a craft retail chain unable to compete with online alternatives and big-box competitors. Most notably, Saks Global—the parent company of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman—filed for Chapter 11 protection in December 2025, securing financing to keep luxury department stores open while restructuring debt. These retail failures reflect fundamental shifts in consumer behavior toward online shopping, price sensitivity due to inflation, and reduced discretionary spending as household budgets tighten under credit card debt and medical expenses.

The healthcare sector experienced particularly acute bankruptcy pressure in 2025, with at least 20 hospitals, health systems, and medical providers seeking or exiting bankruptcy protection according to Becker’s Hospital Review. Facilities included Rock Regional Hospital in Kansas, North Country HealthCare in Arizona, Genesis HealthCare in Pennsylvania, and multiple physician groups across Florida and other states. Primary drivers include declining Medicare reimbursements, rising labor costs as healthcare workers demand higher wages post-pandemic, liquidity constraints limiting access to capital, and reduced patient volumes in some markets. The bankruptcy of Rite Aid for a second time in May 2025—ultimately leading to closure of its remaining 89 stores by October—exemplifies how companies can fail to successfully restructure even after initial bankruptcy protection. As 2026 progresses, experts predict commercial bankruptcies will continue trending upward as the delayed impact of 2023-2024 interest rate increases fully manifests and businesses exhaust pandemic-era financial reserves.

Bankruptcy Filings by State in the US 2026

Data compiled from American Bankruptcy Institute State-by-State Analysis (2024-2025), U.S. Courts District Data (2025), Debt.org Bankruptcy Statistics (2025), Consumer Bankruptcy Project Geographic Analysis (2019-2024), and BankruptcyWatch State Reports (2025)

Bankruptcy filing rates vary dramatically across the United States, reflecting regional differences in income levels, cost of living, state consumer protection laws, healthcare access, and economic conditions. Southern states consistently rank highest in per-capita bankruptcy filings, with Alabama, Tennessee, Georgia, Mississippi, and other Southeastern states experiencing 16-22 filings per 1,000 residents compared to national averages of 8-12 per 1,000. This concentration reflects multiple factors: lower median incomes, higher poverty rates, reduced access to affordable healthcare (particularly in the 10 states that haven’t expanded Medicaid), weaker consumer protection laws, and higher costs for essential goods relative to wages.

Seven of the ten states that haven’t expanded Medicaid eligibility under the Affordable Care Act are located in the South: Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee, and Texas. Research shows that Medicaid expansion reduced medical debt in collections by approximately $5.89 billion, representing a 6.7% decrease in medical debt. States that declined expansion left millions of low-income residents in a coverage gap—earning too much to qualify for traditional Medicaid but too little to afford marketplace insurance—creating precisely the conditions that generate overwhelming medical debt and subsequent bankruptcy. The typical American with medical debt, according to survey data, is a middle-aged, white, working-class woman in the South who has some form of health insurance but faces high deductibles and copayments that accumulate into unmanageable balances.

Conversely, states with the lowest bankruptcy filing rates include Alaska, Hawaii, Massachusetts, and the District of Columbia, where 1-3 filings per 1,000 residents reflect higher median incomes, stronger social safety nets, better healthcare access, and more robust consumer protection laws. In absolute numbers, California, Texas, Florida, and Georgia lead the nation simply due to large populations, though their per-capita rates vary widely. Urban areas within states tend to have higher filing rates than rural areas, driven by elevated cost of living for housing, transportation, and essentials that strain household budgets. The geographic concentration of bankruptcy filings in the South and among states without Medicaid expansion underscores how policy choices regarding healthcare access directly impact financial security and bankruptcy rates.

Economic Factors Driving Bankruptcy Increase in the US 2026

Data compiled from Bureau of Labor Statistics (2024-2025), Federal Reserve Economic Data (2025), CBS News Economic Analysis (January 2026), National Consumer Law Center (2025), and Consumer Bankruptcy Project Research (2024-2025)

The 11-12% increase in bankruptcy filings from 2024 to 2025 stems from a confluence of economic pressures that have accumulated since pandemic relief programs ended. Inflation, while down from 2022 peaks above 9%, remained sticky in the 3-4% range throughout 2024-2025, persistently increasing costs for food, housing, utilities, gasoline, and other necessities faster than wages grew for many workers. The Federal Reserve’s response—holding interest rates in the 5.25-5.50% range through most of 2023-2024 to combat inflation—succeeded in cooling price increases but simultaneously drove borrowing costs to levels not seen in over a decade.

Higher interest rates rippled through every category of consumer debt. Credit card APRs reached 21.39% on average by Q3 2025, the highest level ever recorded, meaning a $10,000 balance generates over $2,100 in annual interest alone if unpaid. Mortgage rates climbed to the 6-7% range, increasing monthly payments for new homebuyers and making refinancing impossible for those with existing 3-4% loans. Auto loan rates reached 7-9%, adding hundreds of dollars to monthly car payments. For Americans already carrying substantial debt, these elevated rates transformed manageable monthly payments into crushing obligations that consumed ever-larger shares of household income. The expiration of pandemic-era relief programs created a fiscal cliff for millions of families.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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