US corporate bankruptcies hover at 16-year high

Corporate bankruptcy filings in the U.S. remain elevated, hovering around a 16‑year high as tighter credit, higher interest rates, and persistent cost pressures push more large companies into Chapter 11 and liquidations. Recent data show that larger public and private company filings are now at their highest level since 2010, underscoring growing credit risk across key sectors, from industrials and consumer discretionary to real estate and retail.cfodive+3

What the Latest Data Show

Recent reporting based on S&P Global Market Intelligence data indicates that 372 larger U.S. private and public companies filed for bankruptcy protection over the latest 12‑month period, the highest count since 2010. This continues an uptrend that began in 2023, when large corporate filings started to accelerate after a prolonged lull during the pandemic stimulus era.cornerstone+2

A separate financial risk analysis finds that total corporate Chapter 7 and Chapter 11 filings climbed above 22,000 in 2025, roughly 18% higher than the 10‑year average of about 18,700 cases. U.S. Courts data likewise show business bankruptcy filings rising 7.1% year‑over‑year in 2025, to 24,737 cases, while total bankruptcies increased 11% over the same period.uscourts+1

While overall filings remain below the peak levels seen in the mid‑2000s and early post‑recession years, the current pace marks the most significant corporate distress in more than a decade.uscourts+1

Drivers: Rates, Credit, and Costs

The primary driver of the recent wave of corporate bankruptcies is the sharp shift in financing conditions following years of ultra‑low interest rates and extraordinary monetary and fiscal support. As pandemic‑era interventions have faded, companies that took on sizable debt or relied on easy credit are now facing materially higher borrowing costs, stricter underwriting, and reduced market liquidity.pillsburylaw+1

Industry analyses point to several overlapping pressures:

• Higher interest rates. Rising benchmark rates have increased debt service burdens, particularly for leveraged borrowers and firms that must refinance maturing obligations in today’s market.pillsburylaw+1

• Tighter credit and risk aversion. Lenders are tightening standards, pricing risk more aggressively, and reducing exposure to weaker credits, limiting refinancing options and pushing more distressed issuers toward restructuring or liquidation.pillsburylaw+1

• Persistent labor and input costs. Wage growth, elevated logistics costs, and higher prices for goods and services continue to squeeze margins for companies unable to fully pass costs through to customers.washingtonpost+1

• Sector‑specific headwinds. Retail, hospitality, real estate, and industrial businesses are disproportionately affected by shifting consumer behavior, post‑COVID space needs, and trade‑related disruptions.washingtonpost+1

Notably, analysts emphasize that, despite the elevated bankruptcy numbers, the current environment is still less severe and less broad‑based than the Great Recession period, with distress concentrated in specific sectors rather than across the entire corporate landscape.washingtonpost+1

Sector Hot Spots and “Mega” Bankruptcies

Large corporate bankruptcies today are not only more frequent; they increasingly involve companies with significant balance sheets and complex capital structures. Recent reports highlight a notable uptick in so‑called “mega‑bankruptcies,” filings by firms with more than $1 billion in liabilities.creditriskmonitor

Sector data and commentary point to several hot spots:

• Industrials and consumer discretionary. S&P data show that industrials and consumer‑facing discretionary companies have led the latest rise in corporate bankruptcies, reflecting sensitivity to tariffs, input costs, and shifting demand.washingtonpost+1

• Retail and hospitality. Brick‑and‑mortar retailers and hospitality businesses continue to grapple with post‑pandemic changes in foot traffic, occupancy, and consumer preferences, often on top of heavy lease and debt burdens.pillsburylaw

• Commercial real estate. Higher financing costs, changing office space needs, and pressure on valuations are driving more restructurings and insolvency proceedings among landlords and property‑related entities.pillsburylaw

The FRISK® Stress Index, a corporate credit risk measure, reached 1.3% in 2026, above the long‑term average bankruptcy rate of about 1%, underscoring that corporate default risk is currently elevated relative to historical norms. For credit and collection stakeholders, that translates into broader portfolios with higher delinquency and default probabilities, especially among mid‑market and highly leveraged issuers.creditriskmonitor

Implications for Credit, Collections, and Compliance

For creditors, servicers, and collection agencies, the multi‑year rise in corporate bankruptcies has several direct implications.uscourts+1

• Increased exposure to corporate default and restructuring. Lenders and trade creditors face higher odds that borrowers will seek court‑supervised restructurings or liquidations, requiring careful monitoring of covenant compliance, collateral values, and counterparty risk.uscourts+1

• More complex workout and recovery strategies. As more filings involve large, multi‑layered capital structures and “mega‑bankruptcies,” recovery efforts depend heavily on accurate priority analysis, timely proofs of claim, and active participation in Chapter 11 plans.creditriskmonitor

• Operational strain on collections. Elevated volumes of distressed accounts can strain internal recovery teams and external agencies, necessitating triage frameworks, data‑driven risk scoring, and cross‑functional coordination with legal and compliance.uscourts+1

• Regulatory oversight and consumer impact. While the current spike is centered on corporate debtors, business failures can cascade into job losses, consumer credit stress, and increased personal bankruptcies, drawing attention from regulators concerned about downstream consumer harm.ftc+1

Compliance teams must also be prepared for evolving expectations around fair treatment, transparency, and documentation in distressed corporate portfolios, especially where business failures affect consumer obligations, such as co‑branded credit products, subscription services, or installment plans.ftc

Strategic Takeaways for Industry Professionals

For readers of Credit and Collection News, the current 16‑year‑high backdrop in corporate bankruptcies is less a short‑term anomaly than a structural shift as economies adjust to higher rates, normalized liquidity, and post‑pandemic business models. Credit and collections professionals can position themselves by:tradingeconomics+1

• Strengthening early‑warning and monitoring. Integrate macro indicators, sector‑specific data, and firm‑level financial metrics (e.g., coverage ratios, refinancing calendars) into risk models to identify stressed names before a filing occurs.tradingeconomics+1

• Prioritizing sectors with rising distress. Allocate analytical and workout resources to industrials, consumer discretionary, retail, hospitality, and commercial real estate, where current data show pronounced filing activity.washingtonpost+1

• Enhancing bankruptcy playbooks. Update internal guidance for Chapter 11 and Chapter 7 cases, including timelines, documentation standards, communication protocols, and coordination with outside counsel and collection partners.uscourts+1

• Preparing for downstream consumer effects. Monitor localized economic impacts—such as layoffs or plant closures—and adjust consumer credit risk assessments and collection strategies accordingly, mindful of regulatory concerns about hardship and fair treatment.ftc+1

One practical illustration: a mid‑market industrial supplier with heavy floating‑rate debt may remain current today but show deteriorating interest coverage as rates stay higher for longer. A proactive credit team that flags this deterioration, revisits terms, and secures additional collateral or covenant protections may significantly improve eventual recovery prospects if the borrower later files.