The 76% Spike in Business Bankruptcy Filings

The data is in, and it confirms the scary reality of our current economic climate. The corporate landscape is undergoing a massive reorganization as corporate bankruptcy filings continue to rise.

According to the latest figures from the Administrative Office of the U.S. Courts and Epiq AACER, Chapter 11 corporate bankruptcy filings spiked 76% in January 2026 compared to the same time last year.

In January, we saw 956 major filings in a single month. To put that in perspective, there were only 544 filings in January 2025.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Takeaways on  Corporate Bankruptcy Filings Rising

• The Corporate Bankruptcy Shock: Business Chapter 11 filings jumped 76% in January 2026, signaling the end of the “stimulus buffer” as companies can no longer delay the inevitable.
• The Consumer Bankruptcy Lag: While total 2025 filings rose 11%, consumer filings outpaced business at 11.2%, proving the strain is hitting households as well.

What’s Driving the Business Bankruptcy Surge?

This isn’t just about individual businesses failing and making poor decisions. There’s a “Related Filings” effect. When a giant like Saks Global or a major restaurant group (Bahama Breeze) hits a wall, they don’t file alone. They pull dozens, sometimes hundreds, of subsidiaries into bankruptcy court with them.

This is the “Financial Reset” in action. Corporations are using the bankruptcy court system to strip away debt, shed “underperforming” assets like the 57 Saks Off 5th stores that will be closing, or all of the Neiman Marcus Last Call stores. These corporations will rewrite their contracts at the expense of employees and vendors. It is for this reason that consumer bankruptcy filings will also continue to rise.

The 2026 Economic Reality Check

While the 2025 data showed a steady 11% rise in total filings (574,314 cases), the January 2026 numbers show an acceleration. The “lagging indicators” and “bankruptcy surge” I often warn about, such as high interest rates, credit tightening, and the “K-shaped” consumer retreat, mean that, finally, businesses have reached their breaking point.

The 5-Year Trajectory: U.S. Bankruptcy Filing Trends (2021–2025)

The following data reflects the official 12-month trailing totals reported by the Administrative Office of the U.S. Courts. It highlights the transition from the “Stimulus Calm” of 2021 to the “Financial Reset” we are experiencing today, as bankruptcy filings across the board have increased.

The table below is for Business and Non-Business Filings for the years ending December 31, 2021-2025.

Year	Business	Non-Business	Total
2025	24,737	549,577	574,314
2024	23,107	494,201	517,308
2023	18,926	434,064	452,990
2022	13,481	374,240	387,721
2021	14,347	399,269	413,616

Below is the total of Bankruptcy filings categorized by Chapters for the years ending December 31, 2021-2025.

Year	Chapter 7	Chapter 13	Chapter 11	Chapter 12
2025	356,724	207,889	9,201	315
2024	310,631	197,244	8,884	216
2023	261,277	183,956	7,456	139
2022	225,455	157,087	4,918	169
2021	288,327	120,002	4,836	276

Professor’s Note: Chapter 7 bankruptcy is the most common type of bankruptcy filed, followed by Chapter 13, especially for individuals. The figures for the Means Test are updated twice each year. For the latest income figures for your state, read this prior article.

For business bankruptcy, Chapter 7 or 11 is filed. Chapter 7 would result in liquidating and closing the business, while Chapter 11 would result in the business restructuring its debt to remain open.

The Professor’s Take: Economic Uncertainty Leads to Financial Paralysis

As I’ve shared regarding my own household’s decision to job-hug and delay our relocation, uncertainty causes people to hold back. The same for corporations, which no doubt have had to deal with what I call the yo-yo effect of the tariffs.

When you see a 76% jump in corporate restructuring, it’s a signal that companies are no longer trying to “wait out” the storm. The storm has reached the corporate shores, and they are filing for Chapter 11 bankruptcy to survive it.

If you are an employee, a vendor, or a consumer, you need to be looking at these numbers as a dashboard where the red light is flashing because eventually, this is felt on Main Street.

Educational Resources

• For Institutions: Colleges and universities may request examination copies of my textbook directly from Routledge Publishing.
• For Students & Practitioners: Single print and digital copies are available via Amazon Books.
• Video Lectures: Stream comprehensive legal breakdowns and video explanations on the Bankruptcy.blog YouTube Channel.

Bankruptcy Court & Consumer Resources

Explore additional consumer guides and state-specific directories to navigate your legal options:

• A step-by-step master guide to completing and understanding the bankruptcy petition.
• Bankruptcy Court Directory: Full listings for the federal bankruptcy court system and trustee contact information.
• State Bankruptcy Exemptions: Review your state‑specific exemptions or compare them with the federal exemptions.
• 341 Meeting Procedures: Prepare for your court date with updated rules, expectations, and practical guidance.

Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.