Why are more Americans filing for bankruptcy in 2025?

Increased bankruptcy filings in 2025 are linked to economic pressures like inflation, high borrowing costs, and mounting credit card debt.

What is the impact of rising commercial bankruptcies on retailers like Forever 21?

Rising commercial bankruptcies have led to the failure of national and regional retailers, impacting the retail landscape.

Are bankruptcy filings returning to pre-pandemic levels?

Experts indicate that the recent rise in bankruptcies signifies a return to pre-pandemic norms after a period of government support.

Home / Business and Economy / Economy Squeezes Households: Consumer Bankruptcies Rise

Economy Squeezes Households: Consumer Bankruptcies Rise

16 Jan

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Summary

Consumer bankruptcy filings rose 12% from 2024 to 2025.
Rising costs of medical insurance and credit card debt fuel filings.
Commercial bankruptcies increased 5% over the same period.

Economy Squeezes Households: Consumer Bankruptcies Rise

Consumer bankruptcy filings in the United States experienced a substantial 12% increase, rising from 478,752 in 2024 to 533,949 in 2025. This trend highlights the growing financial strain on American households due to ongoing economic pressures. Experts point to sticky inflation, high interest rates, and the restart of student loan payments as primary catalysts for these filings.

Beyond consumer debt, commercial bankruptcies have also seen an uptick, with a 5% rise from 2024 to 2025. Notable retail failures, such as Forever 21 and Joann Fabrics, underscore these challenges. Chapter 11 filings, designed for corporate restructuring, increased slightly, influenced by higher interest rates and inflation experienced in 2023 and 2024.

Analysts suggest these increasing bankruptcy rates represent a normalization to pre-COVID-19 levels, as temporary pandemic-era relief measures have faded. While current figures remain below historical pre-pandemic highs, predictions indicate a continued upward trend in filings throughout 2026.