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Bankruptcy is a legal process that is designed to help individuals and businesses facing unmanageable debt a financial fresh start.In 2025, there were 574,314 bankruptcy filings in total in the U.S., the majority (62%) of which were Chapter 7 bankruptcies. [1] U.S. Courts, "Bankruptcy Filings Rise By 11%" https://www.uscourts.gov/data-news/judiciary-news/2026/02/04/bankruptcy-filings-rise-11-percent
This article examines key statistics around bankruptcy in the U.S., including the number of bankruptcies per year, the most common types of bankruptcy, and the demographics of those who file.
Key statistics
- There were 574,314 bankruptcy filings in the U.S. in 2025, an 11% increase from the previous year.
- Non-business filings account for 95.6% of all bankruptcies, with the vast majority filed by individuals rather than companies.
- Chapter 7 is the most common type, accounting for 62% of all filings in 2025, with 356,724 cases.
- Alabama has the highest bankruptcy rate per capita, with 376 filings per 100,000 residents, more than 13 times the rate in Alaska, the lowest-ranked state.
- 78% of filers cited a decline in income as a reason for their bankruptcy, while 65% named medical issues as a reason.
- People whose highest education level is a high school diploma make up the largest share of filers by education level, accounting for 36% of bankruptcies.
- The highest number of bankruptcies on record was 2,078,415 in 2005, the year before the Bankruptcy Abuse Prevention and Consumer Protection Act introduced stricter eligibility requirements.
What is bankruptcy?
Bankruptcy is a federal legal process that allows individuals and businesses to seek relief from debts they are unable to repay. Filing for bankruptcy can result in a discharge, which is a court order that releases the debtor from personal liability for certain debts and prevents creditors from taking collection action against them.
Not all debts can be discharged; alimony, child support, certain taxes, and debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit remain the debtor’s responsibility, among other things. [2] U.S. Courts, "Process - Bankruptcy Basics" https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/process-bankruptcy-basics [3] U.S. Courts, "Chapter 7 - Bankruptcy Basics" https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics
Bankruptcy filings by year in the U.S.
Bankruptcy filings have fluctuated over time in the U.S. due to a wide range of economic factors. The data below shows the total number of bankruptcy filings each year from 1980 until 2025, including both business and non-business filings.
Total bankruptcy filings rose steadily throughout the 1980s, from 331,264 in 1980 to a then-peak of 679,461 in 1989, before continuing to climb through the early 1990s. Filings reached 971,517 in 1992 before declining slightly, then surged again through the late 1990s and into the early 2000s.
The biggest spike in total bankruptcies occurred in 2005, when filings reached 2,078,415, the highest figure on record. This was followed by a sharp drop to 617,660 in 2006, likely reflecting the impact of the Bankruptcy Abuse Prevention and Consumer Protection Act, which was passed by the Senate in March 2005 and introduced stricter eligibility requirements for filing. [4] U.S. Congress, "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" https://www.congress.gov/bill/109th-congress/senate-bill/256
Total bankruptcy filings rose again following the financial crisis of 2007-08, reaching 1,473,675 in 2009, before peaking at 1,593,081 in 2010, 1,536,799 of which were non-business bankruptcy filings. [5] Federal Reserve History, "The Great Recession and Its Aftermath" https://www.federalreservehistory.org/essays/great-recession-and-its-aftermath
The latest data available from the U.S. Courts shows that there were 574,314 bankruptcy filings in total in 2025. [1] U.S. Courts, "Bankruptcy Filings Rise By 11%" https://www.uscourts.gov/data-news/judiciary-news/2026/02/04/bankruptcy-filings-rise-11-percent
| Total Bankruptcy Filings in the U.S. | |||
|---|---|---|---|
| Year | Total Filings | Business | Non-Business |
| 1980 | 331,264 | 43,694 | 287,570 |
| 1981 | 363,943 | 48,125 | 315,818 |
| 1982 | 380,251 | 69,300 | 310,951 |
| 1983 | 348,880 | 62,436 | 286,444 |
| 1984 | 348,521 | 64,004 | 284,517 |
| 1985 | 412,510 | 71,277 | 341,233 |
| 1986 | 530,438 | 81,235 | 449,203 |
| 1987 | 577,999 | 82,446 | 495,553 |
| 1988 | 613,465 | 63,853 | 549,612 |
| 1989 | 679,461 | 63,235 | 616,226 |
| 1990 | 782,960 | 64,853 | 718,107 |
| 1991 | 943,987 | 71,549 | 872,438 |
| 1992 | 971,517 | 70,643 | 900,874 |
| 1993 | 875,202 | 62,304 | 812,898 |
| 1994 | 832,829 | 52,374 | 780,455 |
| 1995 | 926,601 | 51,959 | 874,642 |
| 1996 | 1,178,555 | 53,549 | 1,125,006 |
| 1997 | 1,404,145 | 54,027 | 1,350,118 |
| 1998 | 1,442,549 | 44,367 | 1,398,182 |
| 1999 | 1,319,465 | 37,884 | 1,281,581 |
| 2000 | 1,253,444 | 35,472 | 1,217,972 |
| 2001 | 1,492,129 | 40,099 | 1,452,030 |
| 2002 | 1,577,651 | 38,540 | 1,539,111 |
| 2003 | 1,660,245 | 35,037 | 1,625,208 |
| 2004 | 1,597,462 | 34,317 | 1,563,145 |
| 2005 | 2,078,415 | 39,201 | 2,039,214 |
| 2006 | 617,660 | 19,695 | 597,965 |
| 2007 | 850,912 | 28,322 | 822,590 |
| 2008 | 1,117,771 | 43,546 | 1,074,225 |
| 2009 | 1,473,675 | 60,837 | 1,412,838 |
| 2010 | 1,593,081 | 56,282 | 1,536,799 |
| 2011 | 1,410,653 | 47,806 | 1,362,847 |
| 2012 | 1,221,091 | 40,075 | 1,181,016 |
| 2013 | 1,071,932 | 33,212 | 1,038,720 |
| 2014 | 936,795 | 26,983 | 909,812 |
| 2015 | 844,495 | 24,735 | 819,760 |
| 2016 | 794,960 | 24,114 | 770,846 |
| 2017 | 789,020 | 23,157 | 765,863 |
| 2018 | 773,418 | 22,232 | 751,186 |
| 2019 | 774,940 | 22,780 | 752,160 |
| 2020 | 544,463 | 21,655 | 522,808 |
| 2021 | 413,616 | 14,347 | 399,269 |
| 2022 | 387,721 | 13,481 | 374,240 |
| 2023 | 452,990 | 18,926 | 434,064 |
| 2024 | 517,308 | 23,107 | 494,201 |
| 2025 | 574,314 | 24,737 | 549,577 |
Sources [1] U.S. Courts, "Bankruptcy Filings Rise By 11%" https://www.uscourts.gov/data-news/judiciary-news/2026/02/04/bankruptcy-filings-rise-11-percent [6] ABI, "Annual Business and Non-Business Filings by Year (1980-2021)" https://abi-org.s3.amazonaws.com/Newsroom/Bankruptcy_Statistics/Total-Business-Consumer1980-Present.pdf
Non-business bankruptcy filings
Non-business bankruptcies are sometimes referred to as consumer or personal bankruptcies, as they are filed by individuals rather than corporations. Non-business bankruptcy filings make up the majority of total bankruptcies every year, accounting for 95.6% of filings in 2025.
| Non-business bankruptcy filings by year in the U.S. | |
|---|---|
| Year | Non-Business Filings |
| 1980 | 287,570 |
| 1981 | 315,818 |
| 1982 | 310,951 |
| 1983 | 286,444 |
| 1984 | 284,517 |
| 1985 | 341,233 |
| 1986 | 449,203 |
| 1987 | 495,553 |
| 1988 | 549,612 |
| 1989 | 616,226 |
| 1990 | 718,107 |
| 1991 | 872,438 |
| 1992 | 900,874 |
| 1993 | 812,898 |
| 1994 | 780,455 |
| 1995 | 874,642 |
| 1996 | 1,125,006 |
| 1997 | 1,350,118 |
| 1998 | 1,398,182 |
| 1999 | 1,281,581 |
| 2000 | 1,217,972 |
| 2001 | 1,452,030 |
| 2002 | 1,539,111 |
| 2003 | 1,625,208 |
| 2004 | 1,563,145 |
| 2005 | 2,039,214 |
| 2006 | 597,965 |
| 2007 | 822,590 |
| 2008 | 1,074,225 |
| 2009 | 1,412,838 |
| 2010 | 1,536,799 |
| 2011 | 1,362,847 |
| 2012 | 1,181,016 |
| 2013 | 1,038,720 |
| 2014 | 909,812 |
| 2015 | 819,760 |
| 2016 | 770,846 |
| 2017 | 765,863 |
| 2018 | 751,186 |
| 2019 | 752,160 |
| 2020 | 522,808 |
| 2021 | 399,269 |
| 2022 | 374,240 |
| 2023 | 434,064 |
| 2024 | 494,201 |
| 2025 | 549,577 |
Sources [1] U.S. Courts, "Bankruptcy Filings Rise By 11%" https://www.uscourts.gov/data-news/judiciary-news/2026/02/04/bankruptcy-filings-rise-11-percent [6] ABI, "Annual Business and Non-Business Filings by Year (1980-2021)" https://abi-org.s3.amazonaws.com/Newsroom/Bankruptcy_Statistics/Total-Business-Consumer1980-Present.pdf
Business bankruptcy filings
Business bankruptcies are filed by companies, and make up a much smaller proportion of total bankruptcies each year. Since the 1980s, the trend in bankruptcy filings by businesses has followed a different pattern than the trend in non-business bankruptcies. Bankruptcies filed by individuals steadily increased from 1980 until the peak in 2005, while bankruptcies filed by companies gradually declined from the mid-1980s, before rising in the late 2000s.
Business bankruptcy filings were at their highest in the mid-to-late 1980s, peaking at 82,446 in 1987. During the 1980s, a financial crisis known as the savings and loan crisis (S&L) led to over 1,600 banks insured by the Federal Deposit Insurance Corporation (FDIC) being closed or receiving FDIC financial assistance.
This was due to a number of factors, including unrestrained real estate lending, agricultural recessions, and the collapse of real estate and energy prices. [7] FDIC, "The Banking Crises of the 1980s and Early 1990s: Summary and Implications" https://www.fdic.gov/bank/historical/history/3_85.pdf
Filings began declining in the late 1990s and into the 2000s, but rose again between 2007 and 2009. The U.S. economy entered a recession in December 2007, with the financial crisis of 2007-08 causing widespread economic distress. [5] Federal Reserve History, "The Great Recession and Its Aftermath" https://www.federalreservehistory.org/essays/great-recession-and-its-aftermath
| Business bankruptcy filings by year in the U.S. | |
|---|---|
| Year | Business Filings |
| 1980 | 43,694 |
| 1981 | 48,125 |
| 1982 | 69,300 |
| 1983 | 62,436 |
| 1984 | 64,004 |
| 1985 | 71,277 |
| 1986 | 81,235 |
| 1987 | 82,446 |
| 1988 | 63,853 |
| 1989 | 63,235 |
| 1990 | 64,853 |
| 1991 | 71,549 |
| 1992 | 70,643 |
| 1993 | 62,304 |
| 1994 | 52,374 |
| 1995 | 51,959 |
| 1996 | 53,549 |
| 1997 | 54,027 |
| 1998 | 44,367 |
| 1999 | 37,884 |
| 2000 | 35,472 |
| 2001 | 40,099 |
| 2002 | 38,540 |
| 2003 | 35,037 |
| 2004 | 34,317 |
| 2005 | 39,201 |
| 2006 | 19,695 |
| 2007 | 28,322 |
| 2008 | 43,546 |
| 2009 | 60,837 |
| 2010 | 56,282 |
| 2011 | 47,806 |
| 2012 | 40,075 |
| 2013 | 33,212 |
| 2014 | 26,983 |
| 2015 | 24,735 |
| 2016 | 24,114 |
| 2017 | 23,157 |
| 2018 | 22,232 |
| 2019 | 22,780 |
| 2020 | 21,655 |
| 2021 | 14,347 |
| 2022 | 13,481 |
| 2023 | 18,926 |
| 2024 | 23,107 |
| 2025 | 24,737 |
Sources [1] U.S. Courts, "Bankruptcy Filings Rise By 11%" https://www.uscourts.gov/data-news/judiciary-news/2026/02/04/bankruptcy-filings-rise-11-percent [6] ABI, "Annual Business and Non-Business Filings by Year (1980-2021)" https://abi-org.s3.amazonaws.com/Newsroom/Bankruptcy_Statistics/Total-Business-Consumer1980-Present.pdf
Bankruptcies by state
Data on bankruptcy filings by state from 2024 shows that California had the highest overall number of bankruptcy filings that year at 47,621, followed by Florida (37,156) and Texas (31,520).
In the same period, Alaska had the fewest overall bankruptcy filings at 211, followed by Vermont at 262.
When breaking down state-by-state bankruptcies per capita, Alabama tops the list with 376 bankruptcy filings per 100,000 residents. Mississippi is second with 310, and Tennessee is third with 279 filings per capita.
| Bankruptcy Filings by State (2024) | ||
|---|---|---|
| State | Total filings | Per 100,000 |
| California | 47,621 | 121 |
| Florida | 37,156 | 159 |
| Texas | 31,520 | 101 |
| Georgia | 28,683 | 257 |
| Illinois | 25,998 | 205 |
| Ohio | 24,769 | 208 |
| New York | 21,340 | 107 |
| Michigan | 20,396 | 201 |
| Tennessee | 20,134 | 279 |
| Alabama | 19,395 | 376 |
| Indiana | 16,319 | 236 |
| Virginia | 14,524 | 165 |
| New Jersey | 13,199 | 139 |
| Pennsylvania | 12,666 | 97 |
| Arizona | 11,335 | 149 |
| Maryland | 11,108 | 177 |
| Kentucky | 11,090 | 242 |
| Missouri | 9,772 | 156 |
| Wisconsin | 9,715 | 163 |
| Louisiana | 9,426 | 205 |
| Mississippi | 9,129 | 310 |
| North Carolina | 8,859 | 80 |
| Minnesota | 8,574 | 148 |
| Washington | 8,494 | 107 |
| Nevada | 8,302 | 254 |
| Colorado | 7,761 | 130 |
| Utah | 6,802 | 194 |
| Arkansas | 6,654 | 215 |
| Oklahoma | 6,609 | 161 |
| Oregon | 6,594 | 154 |
| Massachusetts | 4,706 | 66 |
| South Carolina | 4,651 | 85 |
| Kansas | 3,868 | 130 |
| Connecticut | 3,337 | 91 |
| Iowa | 3,202 | 99 |
| Delaware | 2,891 | 275 |
| Nebraska | 2,533 | 126 |
| Idaho | 2,145 | 107 |
| West Virginia | 1,635 | 92 |
| New Mexico | 1,420 | 67 |
| Hawaii | 1,200 | 83 |
| Rhode Island | 968 | 87 |
| New Hampshire | 952 | 68 |
| Montana | 736 | 65 |
| Maine | 638 | 45 |
| South Dakota | 624 | 67 |
| North Dakota | 554 | 70 |
| Wyoming | 526 | 90 |
| Vermont | 262 | 40 |
| Alaska | 211 | 29 |
Sources [8] Investopedia, "Bankruptcy Rates by State" https://www.investopedia.com/bankruptcy-rate-by-state-5188436#toc-state-by-state-breakdown [9] U.S. Census Bureau, "State Population Totals" https://www.census.gov/data/tables/time-series/demo/popest/2020s-state-total.html#v2024
Types of bankruptcy
There are several different types of bankruptcies, and the type someone files for will depend on their financial situation and whether they are filing as an individual or a business owner. The most common types of bankruptcy are Chapter 7, Chapter 13, and Chapter 11.
- Chapter 7 (Liquidation): The most common form of personal bankruptcy, allowing filers to discharge most unsecured debt. The majority of cases are "no-asset," meaning filers typically keep their property.
- Chapter 7 (Liquidation for businesses): For businesses that can no longer meet their financial obligations, a court-appointed trustee sells all company assets to repay creditors, with any remaining debts written off. Unlike a personal Chapter 7, no assets are exempt from liquidation.
- Chapter 13 (Reorganization): An option for individuals with a regular income who want to keep secured assets such as a home. Rather than discharging debt outright, filers repay what they owe through a structured three-to-five-year plan.
- Chapter 11 (Reorganization for Businesses and High-Income Individuals): Primarily used by businesses to restructure debts and operations rather than liquidate entirely. It can also be used by individuals whose debts exceed Chapter 13's limits.
[10] Debt.org, "Types of Bankruptcies" https://www.debt.org/bankruptcy/types/
Number of bankruptcies by type
Chapter 7 bankruptcies are consistently the most common type, with 356,724 in 2025, making up 62% of all bankruptcies that year. This is followed by Chapter 13 bankruptcies, accounting for 207,889 filings in 2025.
| Number of Bankruptcies by Type | |||
|---|---|---|---|
| Year | Chapter 7 | Chapter 11 | Chapter 13 |
| 2021 | 288,327 | 4,836 | 120,002 |
| 2022 | 225,455 | 4,918 | 157,087 |
| 2023 | 261,277 | 7,456 | 183,956 |
| 2024 | 310,631 | 8,884 | 197,244 |
| 2025 | 356,724 | 9,201 | 207,889 |
Source [1] U.S. Courts, "Bankruptcy Filings Rise By 11%" https://www.uscourts.gov/data-news/judiciary-news/2026/02/04/bankruptcy-filings-rise-11-percent
What causes bankruptcy?
The exact cause of bankruptcy can be difficult to pinpoint; in many situations, a combination of different factors ultimately leads someone to file for bankruptcy. It might start with a medical emergency, which leads to reduced income, followed by missing mortgage payments and falling behind on other debts.
A 2024 study that gathered data on why people file bankruptcy cited a survey of people who had filed for bankruptcy. Findings showed that 78% cited a decline in income as a reason for their bankruptcy. Around two-thirds (65%) named medical issues as a key reason, including the cost of hospital visits or medication, or medical conditions that caused themselves or their partner to miss work. [11] Annual Reviews, "Debt on the Ground: The Scholarly Discourse of Bankruptcy and Financial Precarity" https://www.annualreviews.org/content/journals/10.1146/annurev-lawsocsci-042022-112004
Sources
- [1] U.S. Courts, "Bankruptcy Filings Rise By 11%" https://www.uscourts.gov/data-news/judiciary-news/2026/02/04/bankruptcy-filings-rise-11-percent
- [2] U.S. Courts, "Process - Bankruptcy Basics" https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/process-bankruptcy-basics
- [3] U.S. Courts, "Chapter 7 - Bankruptcy Basics" https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics
- [4] U.S. Congress, "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" https://www.congress.gov/bill/109th-congress/senate-bill/256
- [5] Federal Reserve History, "The Great Recession and Its Aftermath" https://www.federalreservehistory.org/essays/great-recession-and-its-aftermath
- [6] ABI, "Annual Business and Non-Business Filings by Year (1980-2021)" https://abi-org.s3.amazonaws.com/Newsroom/Bankruptcy_Statistics/Total-Business-Consumer1980-Present.pdf
- [7] FDIC, "The Banking Crises of the 1980s and Early 1990s: Summary and Implications" https://www.fdic.gov/bank/historical/history/3_85.pdf
- [8] Investopedia, "Bankruptcy Rates by State" https://www.investopedia.com/bankruptcy-rate-by-state-5188436#toc-state-by-state-breakdown
- [9] U.S. Census Bureau, "State Population Totals" https://www.census.gov/data/tables/time-series/demo/popest/2020s-state-total.html#v2024
- [10] Debt.org, "Types of Bankruptcies" https://www.debt.org/bankruptcy/types/
- [11] Annual Reviews, "Debt on the Ground: The Scholarly Discourse of Bankruptcy and Financial Precarity" https://www.annualreviews.org/content/journals/10.1146/annurev-lawsocsci-042022-112004
