Personal Bankruptcy Filings Jump 48% as Pressures Mount

Personal bankruptcy filings in the United States have surged 48% between 2022 and 2025, with 549,577 non-business bankruptcies filed in 2025 alone, according to data from the Administrative Office of the U.S. Courts compiled by Debt.org. The trend shows no signs of abating: filings for the 12-month period ending March 31, 2026 reached 565,890, an 11.9% increase from the prior year. Experts point to the end of pandemic-era relief programs, record credit card debt, persistent medical expenses, and stagnant wages as the primary drivers of this sharp reversal in Americans’ financial fortunes.

The Pandemic Hangover

The current surge represents a normalization following years of artificially suppressed filings. During the COVID-19 pandemic, government stimulus payments, enhanced unemployment benefits, student loan moratoriums, and eviction protections helped push bankruptcies to a historic low of 387,721 total filings in 2022 — a 50% drop from the pre-pandemic level of 774,940 in 2019.

As NPR reported, many experts saw this as a temporary reprieve. “Bankruptcies plummeted [during the pandemic]. They were artificially low and getting back to where they usually are historically,” said Bob Lawless, a professor of law at the University of Illinois and a leading researcher with the Consumer Bankruptcy Project.

By 2025, total filings (including business) had risen to 574,314, up 48.1% from the 2022 trough. Sasha Indarte, a professor of finance at the Wharton School, told NPR: “It’s telling us that consumers are having a harder time coping with their financial obligations.”

Record Credit Card Debt Takes a Toll

A central driver of rising bankruptcies is the unprecedented level of credit card debt weighing on American households. Total U.S. credit card debt reached $1.233 trillion in the third quarter of 2025, the highest level since the Federal Reserve began tracking the data in 1999. With average annual percentage rates hitting a record 21.39%, nearly half of all cardholders carry a balance month-to-month, and 23% have no clear repayment plan.

According to Matt Schulz, chief consumer finance analyst at LendingTree, quoted in the NPR report: “This is basically the end of a long, difficult journey, as opposed to something that just came out of the blue and happened to you overnight.”

Credit card delinquency rates have also climbed sharply, with 6.93% of balances past due by 30 days or more — a figure well above pandemic-era lows. Rising costs for groceries, gasoline, utilities, and housing have forced households to increasingly rely on credit to cover basic necessities.

Medical Debt: The Leading Cause

Medical expenses remain the single largest contributor to personal bankruptcy filings in the United States. Research consistently finds that 60% to 66.5% of personal bankruptcies are tied to medical issues — either directly through unpaid bills or indirectly through income loss due to illness. This translates to more than 550,000 Americans filing for bankruptcy each year largely because of healthcare costs, a phenomenon virtually unique to the United States among developed nations.

According to data compiled by TheWorldData.com, approximately 36% of U.S. households carry some form of medical debt, representing between 21 million and 108 million adults. Total estimated medical debt ranges from $88 billion to $220 billion. A typical pathway to bankruptcy begins with a medical emergency generating hospital bills in the tens of thousands of dollars, which patients charge to credit cards carrying 20%+ interest rates, setting off a cascade of collection actions, wage garnishment, and eventually legal proceedings.

Student Loan Payments Resume, Adding Pressure

The restart of federal student loan payments in October 2023, after a three-year pandemic moratorium, added another layer of financial strain. With $1.7 trillion in outstanding student loan debt nationally, the average borrower faces monthly payments of $200 to $500 — obligations that directly compete with rent, groceries, and healthcare. While student loans are notoriously difficult to discharge in bankruptcy, borrowers increasingly turn to Chapter 7 or Chapter 13 filings to eliminate other debts and free up cash flow for student loan payments.

A Human Toll

Behind the statistics are millions of Americans navigating financial crisis. Rebecca Lessley of Oklahoma City filed for bankruptcy in July 2026 after losing her job the same month she bought her house three years ago. She eventually found new work in social work, but a pile of accumulated debt had become unmanageable. When she posted on Facebook asking for bankruptcy lawyer recommendations, four to five friends responded within an hour — a sign, experts say, of how widespread the experience has become.

“I, in a way, feel a sense of relief,” Lessley told NPR. “Maybe this is what I needed to get me back into a better position and to have a little bit more financial success.”

Structural Shift or Return to Normal?

Amy Quackenboss, executive director of the American Bankruptcy Institute, described the trend as reflecting “mounting economic challenges,” noting that “debt loads are expanding as the prices of goods and services have gone up with inflation and the cost of borrowing continues to rise.”

Yet some economists caution against reading the data as an unmitigated crisis. Mary Eschelbach Hansen, a bankruptcy economist at American University, noted in the NPR report: “Possibly the biggest benefit of petitioning the court for bankruptcy is that all your creditors then have to stop harassing you.” Samuel Antill of Harvard Business School added: “People don’t understand how good of a deal bankruptcy is.”

Chapter 7 filings — which allow for liquidation of assets and discharge of most unsecured debts — saw the largest increase at 15% year-over-year, suggesting many filers lack sufficient income to commit to repayment plans. Chapter 13 filings, which establish three- to five-year repayment plans, rose a more modest 6%. The preference for Chapter 7 over Chapter 13 indicates that for many households, the financial hole has become too deep to climb out of through structured repayment alone.

What’s Ahead

With filings continuing to rise in 2026 — 565,890 non-business cases in the 12 months ending March — the key question is whether this trajectory will approach or exceed the pre-pandemic normal of 774,940 total filings recorded in 2019. Most experts expect filings to continue climbing as the cumulative effects of inflation, high interest rates, and expiring relief programs make themselves fully felt.

The pattern of rising bankruptcies also intersects with broader economic developments, including the recent enactment of the largest housing affordability bill in decades. Whether such policy measures can ease the underlying pressures of medical debt, credit card interest rates, and wage stagnation remains an open question — with millions of American households watching closely.