NewsKPBS Public MediaJuly 29, 2026United States
Why Personal Bankruptcy Filings Are Rising in the U.S.
Personal bankruptcy filings have increased significantly as pandemic-era government financial support has ended. Experts note that while bankruptcy carries a social stigma, it serves as a legal mechanism to manage unmanageable debt and stop creditor harassment.
Read the full story at KPBS Public MediaWhy It Matters
The rise in personal filings reflects a growing number of Americans struggling to meet financial obligations after the expiration of pandemic-era government assistance programs.
Key Facts
- More than half a million personal bankruptcies were filed in the U.S. last year.
- Personal bankruptcy filings saw a nearly 50% increase compared to three years prior.
- Filings at the end of March were up nearly 12% compared to the same month the previous year.
- By 2022, the personal bankruptcy rate had fallen 51% compared to 2019 levels due to pandemic-era government interventions.
- Filing for bankruptcy requires proving to a court that an individual cannot pay their debts.
- The bankruptcy process involves a court-appointed trustee who may oversee repayment plans, asset sales, or debt erasure.
- Filing for bankruptcy triggers an automatic stay that requires creditors to stop collection efforts.
- Research indicates that most individuals see their credit scores recover within a year of filing for bankruptcy.
- Bankruptcy filings are currently rising but remain below pre-pandemic historical norms.
Who's Mentioned
personBob Lawless“Professor of law at the University of Illinois and co-principal investigator for”personMary Eschelbach Hansen“Bankruptcy economist with American University.”personSamuel Antill“Assistant professor at the Harvard Business School.”organizationBureau of Labor Statistics“Source of broader economic data like monthly jobs numbers.”personSasha Indarte“Professor of finance at the University of Pennsylvania's Wharton School.”personMatt Schulz“Chief consumer finance analyst at Lending Tree.”organizationAdministrative Office of the U.S. Courts“Source of data regarding bankruptcy filing statistics.”personRebecca Lessley“An Oklahoma City resident who recently filed for bankruptcy.”