Bankruptcy filings in the US have been rising steadily in 2025 telling us about the growing financial pressure on both households and businesses. According to the Administrative Office of the US Courts, bankruptcies increased by 10.6 percent in the 12 months ending September 30, compared to the previous year. The total number of filings reached 557,376, the highest since 2020.
Why is it increasing?
The rise in bankruptcy filings can be broken down into two key areas: business and personal. Business filings grew by 5.6 percent, while personal filings (those not related to businesses) shot up by 10.8 percent. Though, the current figures remain lower than the peak levels seen in the aftermath of the 2008 financial crisis, this increase explains the financial challenges facing American consumers and businesses in 2025.
High-profile bankruptcies
Some high-profile companies have already filed for bankruptcy in 2025,which explains the pressure many businesses are facing. These include Spirit Airlines, Claire’s jewelry stores, and First Brands, an auto parts company. The rise in bankruptcy filings, particularly among large firms, has raised concerns about risky lending practices and the financial health of major US companies.
Bankruptcy filings remain below historical highs
Bankruptcy filings have followed a steady decline since the 2008 financial crisis, dropping from nearly 1.6 million in 2010 to 380,634 by 2022. However, the trend has reversed in recent years, with a significant uptick beginning in 2020. Now, filings have risen to 557,376.
October 2025 sees big Jump
A separate report from the American Bankruptcy Institute (ABI) showed that total bankruptcy filings reached 53,019 in October 2025—up 12 percent from the previous year. Commercial filings increased by 7 percent, though individual filings saw a 13 percent rise, explaining the broader financial strain on both US households and businesses.
Corporate bankruptcies
S&P Global Market Intelligence also reported that corporate bankruptcies in 2025 are nearing a 15-year high. By October, there were 68 large corporate bankruptcies recorded for the year, bringing the total number of corporate filings in 2025 to 655. This surpasses the figures from the past several years, including 2024, when there were 687 filings. The rise in corporate bankruptcies is particularly visible in sectors like retail, casual dining, and certain services.
Personal and business filings rising together
While business filings have been climbing, most of the increase in bankruptcy cases is coming from consumer petitions (individual bankruptcies). Monthly and quarterly data indicate that individual filings and Chapter 7/13 bankruptcies have been on the rise in 2025.
What is behind this recent rise in bankruptcy filings?
The main reasons are high interest rates, inflation, and the end of pandemic-era support programs. Elevated borrowing costs and soft consumer spending have made it harder for both businesses and consumers to stay afloat. For companies, this has meant rising costs and falling profits. In 2024, several well-known brands faced financial trouble, which continued to affect them into 2025.
While bankruptcy filings are rising in 2025, they are still well below the levels seen after the 2007–2009 Great Recession. During that period, filings reached a peak of almost 1.6 million in 2010, driven by widespread household financial losses. In contrast, the current uptick in bankruptcies is largely due to consumer cash-flow problems, small business distress, and industry-specific failures, rather than systemic credit breakdowns.
Consumer debt on the rise
In addition to business bankruptcies, personal debt is growing, particularly revolving credit (credit cards) and federal student loans. By mid-2025, credit card debt had surged to $1.21 trillion, with delinquency rates rising to 14.1% of credit card balances being 30+ days overdue. Lower-income households are feeling this more, with delinquency rates over 22% for the lowest-income groups.
The end of pandemic-era student loan pauses has also led to a spike in student loan delinquencies. After a nearly 1% delinquency rate during the payment pause, the rate jumped to nearly 8% once payments resumed. As of Q2 2025, about 11.3% of federal student loan dollars were delinquent, and more than 5 million borrowers were 90 or more days past due.
The combination of rising credit card debt, student loan obligations, and high interest rates is putting immense pressure on household budgets. Monthly debt payments are higher than ever, and unexpected expenses like medical bills or auto repairs are pushing many households toward bankruptcy.
