Bankruptcy Filings Soar In 2025

Bankruptcy filings did jump significantly in 2025, but they are generally rising back toward, or modestly above, historical norms rather than signaling a full-scale financial collapse.​

How much did filings rise?

• In the United States, total bankruptcy cases in the federal courts for the year ending September 30, 2025 rose about 10–11 percent year over year, reaching roughly 557,000 cases, the highest annual total since 2020.​

• Consumer (individual) bankruptcies drove most of the increase, with consumer filings up around 12 percent for 2025 and Chapter 7 consumer cases up about 15 percent.​

• Corporate bankruptcies tracked by S&P Global reached about 655 filings in the first 10 months of 2025 and are on pace for the highest level since around 2010, with estimates near 790–800 cases for the full year.​

What is happening with companies?

• Large corporate bankruptcies (companies with over 100 million dollars in assets) have been elevated, with about 117 such filings over the 12 months through mid‑2025, roughly 44 percent above the long‑term annual average.​

• “Mega” bankruptcies (firms with over 1 billion dollars in assets) also surged, with 32 cases in the most recent 12‑month period, well above the historical average, and 17 of them occurring in just the first half of 2025.​

• Analysts link the corporate wave to higher interest rates, stubborn inflation, and new tariffs that are squeezing import‑heavy manufacturers, retailers, and other debt‑laden businesses.​

What is driving consumer filings?

• Elevated interest rates, record credit‑card and household debt, and the resumption of student loan payments are pushing more households into distress, especially lower‑income borrowers.​

• Delinquency on credit cards and auto loans has climbed to multi‑year highs, with serious (90+ day) credit‑card delinquency affecting more than 10 percent of balances, particularly among lower‑income households.​

• Experts point to job losses, medical costs, and higher everyday expenses—rent, groceries, utilities—as key reasons many families ended up seeking bankruptcy protection in 2025.​

Is this only a US story?

• Across the European Union, business bankruptcy declarations also increased in 2025, with Eurostat reporting a 4.4 percent rise in bankruptcies in the third quarter compared with the previous quarter.​

• In France, corporate failures over the 12 months to April 2025 reached nearly 67,000 cases, a level not seen since the early 1990s, reflecting stress on smaller and mid‑sized firms.​

• These trends suggest that tighter financing conditions and weaker growth are pressuring companies not just in the United States but in major advanced economies more broadly.​

How worried should people be?

• Filings are clearly up and, for US corporations in particular, are on track for the highest levels in about 15 years, which signals meaningful financial stress in parts of the economy.​

• However, overall bankruptcies are still below the extreme peaks seen during the 2008–2009 financial crisis and the initial 2020 pandemic shock, so current data indicate a serious but not unprecedented strain.​

• For households, the key risk is that high debt, high rates, and a softer job market persist; for now, the rise looks more like a normalization from unusually low post‑pandemic levels plus added pressure from inflation and policy shifts.​