U.S. Personal Bankruptcy Filings Continue on Sharp Rise

The United States is seeing a sustained spike in personal bankruptcy filings. 

According to recently released data from the U.S. Courts, personal (non-business) bankruptcy filings rose 13 percent during the 12-month period ending March 31, 2025, to 505,771 from 447,458 in the previous 12-month period. What’s more, this latest increase follows a steady upward trend that began in 2022.

One of the primary drivers behind the recent increase in bankruptcies is the lasting economic impact of COVID-19 pandemic-era disruptions. Federal aid programs such as enhanced unemployment benefits, stimulus checks and paused loan repayments provided a temporary financial buffer for millions of Americans. As these programs ended, families found themselves unprepared to resume regular financial obligations. Many still grapple with reduced savings, increased debt and unstable job prospects.

Another factor contributing to the uptick is the expiration of pandemic-related moratoriums on evictions and foreclosures. These legal protections shielded vulnerable households from losing their homes or facing aggressive collections. The sunset of these provisions has exposed many families to renewed financial turmoil. The U.S. courts have noted an increase in both Chapter 7 and Chapter 13 bankruptcies.

Inflation has also played a significant role. The past few years have seen persistent increases in rents, food prices, healthcare costs and transportation expenses. While some costs have moderated, prices for many essentials remain substantially above pre-pandemic levels. This has been coupled with rising interest rates, which drive up the cost of mortgages, credit card balances and other types of borrowing.

Medical debt continues to be a major cause of personal bankruptcy. Many people are without adequate health insurance coverage. Even those that are insured face high out-of-pocket costs for significant medical events, and unexpected health crises can rapidly erode financial stability. According to various consumer advocacy groups, medical expenses remain the single largest driver of bankruptcy filings.

Bankruptcy is not a one-size-fits-all solution and should be considered alongside other debt-relief remedies. If you are in financial distress or struggling to manage debt, an experienced bankruptcy attorney can evaluate your entire financial situation, explain the options available — including non-bankruptcy alternatives — and help you pursue the best path. Early intervention and guidance can often mean the difference between a temporary setback and a long-lasting impact on your financial future.

At The Law Firm of Richard L. Ellison, P.C., serving Kerrville and the Texas Hill Country, we listen, offer honest advice, and help you explore whether Chapter 7, Chapter 13 or another form of debt relief is best for you. Call 830-955-8168 or contact us online today to schedule a confidential consultation.