Bankruptcies Surge in US

Bankruptcies are soaring across the U.S. in 2026 on the back of persistent economic headwinds and an increase in both commercial and consumer filings.

According to recent data from Epiq AACER, cited in an analysis from the American Bankruptcy Institute (ABI), total bankruptcy filings rose 14 percent year-over-year in the first quarter of 2026.

Why It Matters

As experts note, widespread affordability strains have impacted businesses and individuals over the past few years, with inflation and consumer debt at elevated levels, and resulting pressures on demand hurting many companies' bottom lines.

“This acceleration aligns with broader economic pressures,” said Epiq AACER Vice President Michael Hunter, “including household debt nearing $18.8 trillion and delinquency rates worsening to 4.8 percent across outstanding balances in late 2025, with notable upticks in credit card, mortgage, and student loan delinquencies amid persistent inflation and elevated interest rates.”

What To Know

According to ABI, there were a total of 150,009 bankruptcy filings in the first quarter of the 2026 calendar year, up from 132,094 over the same period in 2025. Both consumer and commercial filings rose 14 percent-to 131,573 and 8,436, respectively.

Individual chapter 7 filings-the most common form of consumer bankruptcy-totaled 89,259 in the first quarter, up 17 percent from the same period a year earlier. Chapter 13 filings-which allow individuals to keep hold of their assets while reorganizing debts over time-also rose, increasing eight percent year-over-year to 51,962.

Notably, Subchapter V elections-a form of chapter 11 bankruptcy designed for small businesses-rose 67 percent to 833 in the first quarter.

ABI Executive Director Amy Quackenboss pointed to “persistent inflation, high interest rates, restricted credit, and global instability” as factors that had worsened “the economic challenges of struggling families and small businesses.”

And separate research from JG Wentworth has found that cost-of-living strains and tariffs have also contributed to increases in personal bankruptcies. In a February poll of 1,421 U.S. adults by the financial services firm, 43.3 percent said their bankruptcy could be attributed to the former, while 41.7 percent cited tariffs as a contributing factor.

What People Are Saying

Epiq AACER Vice President Michael Hunter said: “The first-quarter numbers paint a clear picture: bankruptcy filings are up 14 percent overall, driven by a 67 percent jump in Subchapter V elections and solid increases in both commercial and consumer cases.”

What Happens Next

ABI said it supports efforts in Congress to make it easier for financially strained individuals and businesses to access certain bankruptcy options, advocating for the permanent relaxation eligibility rules that were loosened during the pandemic.

It cited bipartisan legislation, introduced last month, that would permanently increase the small business reorganization eligibility threshold for Chapter 11 bankruptcy to $7.5 million.

“The Bankruptcy Threshold Adjustment Act will give small businesses the certainty they need to reorganize, restructure, and keep operating when challenges arise,” said Republican Representative Ben Cline, one of the bill's sponsors. “By permanently raising the eligibility threshold, we're ensuring more job creators can access a streamlined and affordable bankruptcy process that helps them stay open, protect paychecks, and meet their obligations.”

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This story was originally published April 6, 2026 at 3:55 AM.