2025 saw a significant rise in bankruptcy filings across the nation, with total cases reaching 574,314, an 11% increase over the previous year, according to the Administrative Office of the U.S. Courts. At Gillman Capone, we understand that these statistics represent real individuals and business owners squeezed by relentless financial pressure.
Our bankruptcy attorneys have served as dedicated advocates for debtors for over 25 years. We help clients navigate this shifting landscape by first exploring alternative solutions, such as negotiating loan modifications, before discussing a bankruptcy petition. Our goal is to provide the compassionate, comprehensive support you need to find the right path for your specific situation.
What Were Core Drivers Behind the 2025 Surge in Bankruptcy Filings?
This jump in filings was fueled by a perfect storm of record debt and high borrowing costs. Total U.S. household debt hit a record $18.8 trillion by the end of 2025, while credit card balances reached an all-time high of $1.28 trillion. With average APRs often exceeding 22%, this high-interest revolving credit became a trap for many families. While the Federal Reserve began small cuts late in the year, rates remained at multi-decade highs for most of 2025, making it nearly impossible for many to service auto loans and credit cards alongside their mortgages.
Furthermore, individual households faced increased strain from rising healthcare costs and insurance premiums, which climbed by an average of 18%. The data also reveals a widening wealth gap in how debt is managed. While higher earners often utilized savings or loan modifications to avoid court, middle-class debtors increasingly turned to Chapter 13 to protect their homes from foreclosure.
Consequently, 2025 saw a clear preference for reorganization over total liquidation, with consumer Chapter 13 filings rising to over 200,000 cases. This allowed homeowners to catch up on missed payments through three-to-five-year plans while protected by an automatic stay. For the business sector, Subchapter V filings saw an 11% increase, providing small businesses with a cost-effective alternative to stay afloat rather than facing total liquidation. At Gillman Capone, we see these trends as a signal that many financial safety nets have frayed, making legal intervention more necessary than ever.
How Gillman Capone Can Help You Navigate 2026
The rise in bankruptcies throughout 2025 has created a difficult financial environment in 2026. At Gillman Capone, we believe you need a partner who understands the real-world pressures behind these statistics. If you are struggling with insurmountable debt, we can provide a deep review of your entire financial situation, looking at your income, assets, and long-term goals to find the best path forward.
Whether that means clearing debt, protecting your home through a payment plan, or finding ways to keep a small business running, our priority is a solution tailored to you. If we can resolve your debt through a loan modification or direct negotiation without going to bankruptcy court, we will.
Request a Case Review From Our Experienced Bankruptcy Attorneys
Our team of bankruptcy attorneys handles the heavy lifting of the legal process, making sure every document is accurate and every claim is checked. We know how stressful this time is, so we offer a supportive space where you can ask hard questions about what you can keep and how to move forward.
The record levels of debt and the increase in filings across the country last year were a wake-up call for many, but they do not have to define your future. We provide the clear strategy you need to get your life back on track and find peace of mind. Contact Gillman Capone today for your confidential case review.
