Personal Bankruptcy Filings Surge as Americans Face Growing Financial Strain

Bankruptcy filings across the U.S. have surged in 2025, underscoring the mounting financial strain and deepening pessimism among American households.

A new report from the American Bankruptcy Institute, citing data from Epiq AACER, revealed 249,152 Chapter 7 filings—the most common form of personal bankruptcy—through the first nine months of 2025. That marks a 15% increase from the 216,773 filed during the same period in 2024.

Why It Matters
Epiq AACER attributed the rise to “mounting financial pressure” on households, pointing to growing debt loads, stubborn inflation, and widespread unease about personal economic security. Americans have faced elevated prices, weakening job prospects, and a general downturn in the nation’s economic outlook.

What To Know
Overall bankruptcy filings climbed 10% year-over-year to 423,053, with individual cases up 11% to 399,387. Chapter 13 filings—used by wage earners to reorganize debt—rose 4.3% to 149,337. The figures align with data from the Administrative Office of the U.S. Courts, which reported an 11.8% annual increase in nonbusiness filings through June 30.

Sara Greene, a Duke University law professor, said the trend reflects how “the margin of safety for many Americans has shrunk.” She cited higher interest rates, rising debt burdens, and the end of pandemic-era supports like student loan pauses and expanded tax credits. With wage growth stagnating and the social safety net thinning, she warned, “even modest shocks” could push more households toward bankruptcy.

Economic Context
Consumer sentiment is also slipping. The RealClearMarkets/TIPP Economic Optimism Index fell to 48.3 in October—its lowest since May—signaling sustained pessimism. The New York Fed’s consumer survey showed rising inflation expectations and fewer Americans expecting to be better off next year.

What People Are Saying
Epiq AACER’s vice president Michael Hunter noted that September’s 19% surge in Chapter 7 filings highlights “mounting financial pressure on households nationwide.” Greene added that continued high interest rates and persistent inflation “will keep bankruptcy numbers climbing.” ABI’s executive director Amy Quackenboss agreed, saying bankruptcies are “approaching pre-pandemic levels” as household debts grow and lending tightens.

What Happens Next
Epiq AACER expects the upward trajectory to persist through year-end, with “a strong likelihood of accelerating into 2026.”