Understanding the Rise of Bankruptcy: 2025 Trends
Bankruptcy Filings Surge 11.5% in 2025
Personal and business bankruptcy filings jumped 11.5% in the twelve-month period ending June 30, 2025, continuing a steady upward trend after years of historic lows. According to the latest release from the Administrative Office of the U.S. Courts, total filings reached 542,529, up from 486,613 the previous year.
Breaking Down the Numbers
Business filings increased 4.5%, from 22,060 to 23,043, while non-business filings increased 11.8%, from 464,553 to 519,486.
The latest bankruptcy figures show a reversal of a downward trajectory that began in 2010, when filings peaked near 1.6 million. This was just two years after the Great Recession. But now there have been increases since mid-2022 which are likely the effects of the coronavirus pandemic.
Chapter 7 bankruptcy is the most common type of bankruptcy filed, and continues to be, accounting for over 60% of petitions filed. Chapter 13 filings also saw steady growth. There has also been an increase in Chapter 12, which is for the farming and fishing industry. Midway through 2025, Chapter 12 filings have surpassed the figures from last year.
Tariffs and AI Reshaping Economic Stability
As bankruptcy filings increase, we face an uncertain future because of tariffs and AI (Artificial Intelligence). The tariff war not only creates financial uncertainty for businesses, but the increased tax on importing goods gets passed on to consumers.
At the same time, workforce reductions tied to accelerated AI adoption have left many individuals navigating sudden unemployment or reduced hours. Together, these factors are reshaping the economic landscape that will have a lifetime effect on the economy as we know it.
This one-two punch is not a temporary jolt. This will mark a structural shift that could impact the economy for decades.
Business and Non-Business Filings, Years Ending June 30, 2021-2025
| Year | Business | Non-Business | Total |
|---|---|---|---|
| 2025 | 23,043 | 519,486 | 542,529 |
| 2024 | 22,060 | 464,553 | 486,613 |
| 2023 | 15,724 | 403,000 | 418,724 |
| 2022 | 12,748 | 367,886 | 380,634 |
| 2021 | 18,511 | 443,798 | 462,309 |
Total Bankruptcy Filings By Chapter, Years Ending June 30, 2021-2025
| Year | Chapter 7 | Chapter 11 | Chapter 12 | Chapter 13 |
|---|---|---|---|---|
| 2025 | 333,321 | 8,408 | 282 | 200,290 |
| 2024 | 284,975 | 8,717 | 181 | 192,421 |
| 2023 | 239,125 | 5,986 | 147 | 173,362 |
| 2022 | 239,750 | 4,429 | 201 | 136,169 |
| 2021 | 335,886 | 6,871 | 438 | 118,864 |
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Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.
Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.
You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.
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