Bankruptcy Filings Surge 12% in First Half of 2026 as Americans Struggle

Bankruptcy filings in the United States are accelerating sharply. In the first half of 2026, total filings reached 310,550, a 12% increase from the same period in 2025, according to Epiq AACER data. Small business Chapter 11 filings jumped 50% year-over-year to 1,663 subchapter V elections. Higher borrowing costs, rising expenses, and persistent consumer debt are pushing both individuals and small businesses toward restructuring or debt relief.

Personal bankruptcies climb as consumer debt pressures mount

Individual bankruptcy filings hit 293,265 in H1 2026, up 12% from 260,966 in H1 2025. Chapter 7 liquidations rose 15% to 187,572 filings, while Chapter 13 reorganizations increased 8% to 104,997 filings. Michael Hunter, vice president of Epiq AACER, noted that auto delinquencies remain near multi-year highs, foreclosure activity has risen notably, and credit card balances continue to drive individuals to Chapter 7 and Chapter 13 relief. The average credit card interest rate stands at 19.35% as of July 2026, making debt repayment harder for consumers already stretched thin.

Small businesses face a 50% surge in Chapter 11 filings

Small business bankruptcy filings are accelerating even faster than personal ones. Subchapter V elections within Chapter 11 reached 1,663 in H1 2026, a 50% jump from 1,107 in H1 2025. Overall commercial filings totaled 17,285, up 13% from 15,340 in the prior year period. Amy Quackenboss, executive director of the American Bankruptcy Institute, stated that higher borrowing costs, increasing expenses, and geopolitical volatility are leading more debtors to turn to the bankruptcy system to restructure obligations. Commercial Chapter 11 filings specifically rose 28% to 4,589 cases.

Broader trend extends 47% surge since 2022

The 2026 surge continues a longer pattern of financial strain. Personal bankruptcy filings rose 47% from 2022 to 2025, reaching 549,577 filings in 2025 alone. That equals an average of 1,489 Americans filing for bankruptcy each day in 2025. Chapter 7 liquidations accounted for 62.3% of personal filings in 2025, while Chapter 13 reorganizations made up 37.6%. The trend shows no signs of slowing as borrowing costs remain elevated and consumer debt obligations persist.

Regional disparities reveal concentrated financial stress

Bankruptcy filings are not evenly distributed across the country. Alabama led the nation with 506.5 filings per 100,000 adults in 2025, followed by Mississippi at 420.5 and Tennessee at 375.3, all well above the national rate of 203.5. Alaska, Maine, and Vermont had the lowest rates, with fewer than 50 filings per 100,000 adults. Between 2024 and 2025, filings increased in almost every state, rising 11.3% nationwide. Only Maine and New Hampshire saw fewer bankruptcies in 2025 than in 2024.

Final Thoughts

Bankruptcy filings are accelerating across both consumer and small business sectors in 2026, driven by elevated borrowing costs and persistent debt pressures. With personal filings up 12% and small business Chapter 11 filings surging 50% in the first half alone, financial strain is spreading wider. Investors should watch credit quality and consumer spending trends closely.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.