Consumer bankruptcy filings in the United States have increased double digits in the first half of 2025. Total individual filings rose by 11% compared to the same period in 2024. Chapter 7 filings, which involve liquidation, increased by 15%, while Chapter 13 filings, for debt reorganization, saw an approximately 3% rise.
Several factors are contributing to this trend, including elevated interest rates, high levels of credit card and household debt, and the resumption of student loan repayments and collections. Student loan delinquency rates have significantly increased, and the restart of collections is expected to further drive up individual filings. Rising living costs and increasing expenses for housing and insurance are also leading more people to rely on credit.
Based on the current rate, total bankruptcy filings could exceed 600,000 cases by the end of 2025. The increasing trend suggests that financial stress on consumers may continue, potentially reaching over 700,000 cases annually by 2027