US personal bankruptcies surge past 500,000, marking a sharp reversal of a decade-long decline

Personal bankruptcy filings in the United States have surged, exceeding 500,000 cases in 2025—about 50% more than in 2022—and rising another 12% in June 2026 compared with the prior year. The decline that began after the 2010 peak of roughly 1.5 million filings hit its nadir at about 368,000 in 2022, largely due to the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which introduced income limits, mandatory credit counseling and post-filing financial-management courses.

Recent economic pressures, including wages that have not kept pace with inflation and sharply higher credit-card interest rates, are driving the rebound. While a bankruptcy remains on a credit report for up to ten years, a study by law professor Lois Lupica found that catching up financially with peers typically requires 15 to 25 years. The analysis highlights that using cash for everyday purchases and negotiating hardship arrangements can help stave off filing, and recommends consulting a bankruptcy attorney when needed. Originally published by one outlet, the piece signals growing financial distress among American consumers.