Consumer and commercial bankruptcy filings in the U.S. have surged, with total consumer filings increasing by 12% in 2025 compared to the previous year.
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Rising costs of medical insurance, credit card debt, and student loan repayments are major factors driving bankruptcies.
Commercial bankruptcies rose by 5% in 2025, with notable retailers like Forever 21 and Joann Fabrics facing financial challenges.
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Chapter 11 bankruptcies increased by 1% in 2025, driven by higher interest rates and inflation, with Saks Global being a recent high-profile filer.
While bankruptcy offers a financial reset, it can have long-term consequences such as damaging credit scores and limiting future loan qualifications.
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The increase in bankruptcies is seen as a return to pre-pandemic norms, with experts predicting filings to continue rising in the coming years.
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