Personal bankruptcy filings in the United States rose for the third straight year in 2025, climbing nearly 50 percent from their recent low in 2022, according to a new report.
There were 549,577 personal bankruptcy filings last year, loan marketplace LendingTree said in a study published July 6. That equals an average of 1,489 Americans filing for bankruptcy each day.
The total marked an 11 percent increase from 494,201 filings in 2024 and a 46.9 percent jump from 374,240 filings in 2022, when filings reached a recent low.
Chapter 7 bankruptcies accounted for the majority of personal filings in 2025, making up 62.3 percent of the total. Chapter 7, often referred to as the “clean slate” or liquidation bankruptcy, can involve the sale of nonexempt assets to repay creditors.
Chapter 13 bankruptcies, which allow individuals with regular income to repay some or all of their debts through a court-approved repayment plan, accounted for 37.6 percent of filings.
Alabama had the highest personal bankruptcy rate in the country, with 506.5 filings per 100,000 adults in 2025. It was followed by fellow Southern states Mississippi at 420.5, Tennessee at 375.3, and Georgia at 352.8, all well above the national rate of 203.5.
At the other end of the spectrum, Alaska, Maine, and Vermont had the lowest bankruptcy rates, with 36.9, 46.2, and 47.5 filings per 100,000 adults, respectively. The low-filing states generally have smaller populations and stronger income profiles, which may reduce the need for bankruptcy protection, LendingTree said.
California recorded the largest number of personal bankruptcy filings, with 51,364, followed by Florida with 42,289 and Texas with 33,979. Together, the nation’s three most populous states accounted for 23.5 percent of all personal filings nationwide.
Matt Schulz, LendingTree’s chief consumer finance analyst, said rising living costs and expensive debt have left many Americans with fewer options.
“Housing, insurance, groceries, and healthcare all remain significantly more expensive than they were a few years ago, leading many households to rely on credit cards to bridge the gap,” Schulz said.
“At the same time, higher interest rates have made that debt far more costly to carry, causing balances to grow faster than people can pay them down,” he added. “Given that combination of rising debt and sky-high interest rates, it’s not surprising that more people are turning to bankruptcy for relief.”
The LendingTree report is broadly consistent with federal court data showing that bankruptcy filings continued to climb in 2025.
According to the Administrative Office of the U.S. Courts, total bankruptcy filings rose 11 percent in the 12-month period ending Dec. 31, 2025, reaching 574,314 cases. Nonbusiness filings rose 11.2 percent to 549,577, while business filings increased 7.1 percent to 24,737.
Bankruptcy filings remain far below historical highs. Total filings peaked at nearly 1.6 million in 2010, then declined for more than a decade before reaching a low in 2022 and rising again in the years that followed, according to U.S. Courts.
More recent data suggest the upward trend has continued into this year.
In May, there were 31,668 individual Chapter 7 filings, up 10 percent from 28,680 a year earlier, according to the American Bankruptcy Institute, a nonpartisan think tank created by Congress to study bankruptcy trends. Individual Chapter 13 filings also rose 3 percent to 17,146 from 16,685 in May 2025.
In addition to personal bankruptcies, business bankruptcies have also increased in the past year.
Small businesses also continued to seek court protection through Subchapter V of Chapter 11, a streamlined reorganization process available to small firms and certain individuals whose debts fall below a set threshold.
Subchapter V filings rose 11 percent in 2025 to 2,446, up from 2,202 in 2024, according to Epiq Bankruptcy Analytics data cited by American Bankruptcy Institute.
“For debt-burdened families and companies, bankruptcy remains a critical pathway to restore stability and rebuild toward a stronger financial future,” said Amy Quackenboss, executive director of the American Bankruptcy Institute.
