Bankruptcies are soaring in the U.S., highlighting the growing financial distresses facing businesses and individuals.
According to data released Thursday by the Administrative Office of the U.S. Courts, personal and business bankruptcy filings surged 11.5 percent over the 12 months ending June 30. Filings totaled 542,529 over the period, compared with 486,613 the previous year.
Why It Matters
The data covers the final months of Joe Biden’s presidency and the beginning of Donald Trump’s second term, barring any clear attribution of responsibility for the near-nationwide increases.
While the U.S. economy has remained resilient—with healthy GDP growth and what the Federal Reserve has called “solid” labor market conditions—financial pressures continue to surface in 2025 as a result of stubborn inflation, a broader increase in the cost of living and the emerging impacts of Trump’s tariffs on consumers.
What To Know
Newsweek analyzed the data included in the U.S. Courts report, using the findings to create a map showing which states have seen the largest increases in bankruptcy filings over the past year.
Rhode Island tops the list, with bankruptcy filings up 27.6 percent in the 12 months ending June 30. It is followed by Florida and Minnesota—otherwise strong economies with favorable business conditions—where filings increased 23.5 and 21 percent, respectively.
The remaining states in the top 10 were:
4. Vermont: 20.3 percent
5. Texas: 19.4 percent
6. Idaho: 19.1 percent
7. Maine: 17.9 percent
8. Colorado: 17.6 percent
9. Iowa: 17.0 percent
10. California: 16.6 percent
Only three states—South Dakota, Alaska and Delaware—saw bankruptcy filings fall during the period.
As noted in Thursday’s announcement, both personal and business filings are on the rise. Business filings increased 4.5 percent to 23,043 from 22,060, while nonbusiness filings jumped 11.8 percent to 519,486 from 464,553.
According to a recent report from financial analytics and credit rating firm S&P Global, corporate bankruptcies in the first six months of the year reached their highest rate since 2010 and have put 2025 “on track to be one of the busiest years for filings in more than a decade.”
Meanwhile, April analysis from LegalShield revealed that personal bankruptcy inquiries rose to their highest post-pandemic level in the first three months of the year. The legal services provider more recently found that while bankruptcy inquiries eased in the second quarter, they remain “significantly elevated” compared to 2024, and that legal inquiries regarding foreclosures had jumped to the highest rate since November 2020.
What People Are Saying
Matt Layton, LegalShield senior vice president of consumer analytics, wrote in April: “Bankruptcy inquiries hit the highest we’ve seen since early 2020, just before Americans’ checkbooks were boosted by COVID checks from the government. When you combine record debt, rising delinquencies, and prolonged financial stress, topped by price pressures driven by tariff uncertainty, the risk of a summer surge in bankruptcy filings becomes very real.”
“Debt is the common thread behind rising consumer stress,” he said in July. “Whether it’s missed mortgage payments, maxed-out credit cards, or mounting buy-now-pay-later balances, debt-fueled household spending is forcing people to ask a lawyer for help.”
What Happens Next
The next U.S. courts data on bankruptcy filings will be released in late October and cover the quarter ending September 30.
Correction 08/04/25 10:03 a.m. ET: This article was corrected to state that business filings rose by 4.5 percent the 12-month period ending June 30, 2025, compared with the previous year, not personal.
