Bankruptcy filings in the United States saw a significant increase in 2024, and this shift has impacted both businesses and everyday consumers. As the economy continues to change, more people are seeking legal help to protect their finances and property.
At Consumer Law Attorneys, we take pride in helping Floridians with their legal needs during these challenging times. If you or someone you know needs guidance with debt or bankruptcy, contact us today to speak with a Florida bankruptcy lawyer about your situation.
A Look at the Rising Bankruptcy Filings
According to data from Epiq AACER, which tracks U.S. bankruptcy filings, there was a clear jump in bankruptcy cases in 2024. Commercial chapter 11 cases (which often apply to businesses seeking to reorganize their debts) rose by 20% in 2024. These filings went from 6,583 cases in the previous year to 7,879.
This is not the only sign of trouble for businesses. The total number of commercial filings (which includes all kinds of business bankruptcies, not just chapter 11) also went up by 17%. In 2023, there were 25,731 commercial bankruptcy filings. In 2024, there were 30,009. These numbers show that more businesses found themselves in financial distress and needed legal protection.
Changes in Subchapter V Filings
A special type of chapter 11 bankruptcy called “subchapter V” is designed to help small businesses. In 2024, there was a 32% increase in these filings. The number went from 1,808 in 2023 to 2,381 in 2024.
Subchapter V can be helpful for small business owners who want a simpler and faster process than a regular chapter 11. It aims to keep costs down and make it easier for small businesses to reorganize and continue operating. However, there was a moment when higher debt limits for these filings expired on June 21, 2024. Once those limits ended, the rate of increases for both subchapter V cases and consumer chapter 13 cases slowed down.
Overall Bankruptcy Numbers
In total, there were 508,758 bankruptcy filings in 2024. That is 14% more than the 445,286 filings in 2023.
Although this rise is significant, the overall numbers still remain below the pre-pandemic levels. For example, in 2019, there were 757,816 bankruptcy filings across the United States. Even though 2024’s jump is big, it has not yet matched the numbers before COVID-19 changed the world.
The majority of these filings were consumer bankruptcies. Out of all filings in 2024, 478,749 were by everyday consumers. That is also a 14% increase from the 419,555 consumer filings in 2023. This means more individuals and families are facing financial strain and turning to the bankruptcy system for relief.
Breaking Down Consumer Filings
Consumer bankruptcies are usually filed as either Chapter 7 or Chapter 13.
- Chapter 7: Often called “liquidation” bankruptcy, chapter 7 allows people to have certain debts wiped out, though they might have to give up some property. In 2024, there were 288,968 consumer chapter 7 filings. That is a 19% increase from the 242,919 in 2023.
- Chapter 13: Sometimes called “wage earner’s” bankruptcy, chapter 13 allows people to keep their property but follow a repayment plan. In 2024, there were 188,934 consumer chapter 13 filings, a 7% increase from 175,977 in 2023.
The growth in these numbers shows that more Americans are turning to bankruptcy to handle their debt. With rising costs of living, higher interest rates, and changes in the job market, many people are struggling to make ends meet. Bankruptcy can be a legal avenue to deal with debt and get a fresh start.
Expert Views on the Growth Trend
Michael Hunter, Vice President of Epiq AACER, noted that he and his team had anticipated a rise in bankruptcy filings in 2024. He expects this trend to continue through 2025. According to Hunter, if the current trend goes on, bankruptcy filings could return to “normal” (pre-pandemic) levels within the next 24 to 30 months.
He also pointed to modest rises in household debt and higher delinquency rates as signs of growing financial stress on American households. These problems are likely to keep fueling bankruptcy filings in the near future.
Similarly, Amy Quackenboss, the Executive Director of the American Bankruptcy Institute, offered her own insights. She says that rising interest rates, inflation, geopolitical tensions, and changes in consumer spending all combine to create a tough environment for both families and businesses. As a result, more people are turning to bankruptcy to find a way out of mounting debt.
December 2024 Data
Even when looking at just December 2024, the numbers show that bankruptcy filings continued to grow. There were 38,121 total bankruptcy filings in December 2024, which is an 11% rise from 34,486 in December 2023. Consumer bankruptcy filings for December 2024 were 35,793, also 11% more than the 32,391 consumer filings in December 2023.
Within these consumer filings, chapter 7 rose by 17%, from 18,718 in December 2023 to 21,918 in December 2024. Chapter 13 consumer filings went up by just 1%, from 13,629 to 13,804. This smaller rise might be connected to the expiration of certain debt limit increases that helped more people qualify for chapter 13 earlier in the year.
Reasons Behind the Increase in Bankruptcy Filings
There are many reasons why bankruptcy numbers are on the rise:
- Economic Pressures: Many families are dealing with higher prices on goods and services. Inflation makes day-to-day expenses cost more, leaving fewer dollars to pay down debt.
- Rising Interest Rates: When interest rates rise, mortgages, car loans, and credit card balances become more expensive to maintain. People who were able to handle their debts when rates were low may not be able to keep up with payments as rates go up.
- Ending of COVID-19 Relief Programs: Some federal or state relief programs that started during the pandemic have ended. These programs helped people stay afloat by deferring loan payments or granting extra financial support. With that support gone, many folks find themselves in trouble once again.
- Geopolitical Issues: Global uncertainties can have big effects on the U.S. economy, leading to job losses or increases in the cost of important goods.
- Shifts in Consumer Spending: After the pandemic, people started spending differently. Businesses that counted on old spending patterns may have faced financial strain, causing some to file for bankruptcy.
Each person’s situation can be different, but these factors can combine to make it harder for both individuals and businesses to manage their debts without legal help.
What Does a Rise in Bankruptcy Filings Mean for You?
A rise in bankruptcy filings can mean several things:
- More Consumers Seeking Relief: If you are dealing with overwhelming credit card debt, medical bills, or unsecured loans, you are not alone. Bankruptcy can be a powerful solution to reset your finances.
- More Businesses Restructuring: Many small and large businesses are using bankruptcy to reorganize or reduce their debt. If you own a small business, subchapter V might be an option to help you stay operational while addressing your debts.
- Greater Need for Legal Guidance: Because laws and procedures can be complex, having an attorney is a big help. A lawyer can help you figure out which type of bankruptcy fits your situation.
How Consumer Law Attorneys Can Help
If you find yourself struggling with debt, whether it is from medical bills, credit cards, mortgage payments, or other obligations, Consumer Law Attorneys is here to help. Our team is experienced in foreclosure defense, HOA defense, collection defense, and personal injury cases. We also focus on different types of bankruptcy, including chapter 7, chapter 13, and even subchapter V for qualifying small businesses.
Why choose us?
- Commitment to Excellence: We fight hard for our clients and keep their best interests at the forefront.
- Passion for Justice: Our attorneys believe in standing up for the rights of consumers and homeowners.
- Fair & Affordable Pricing: We strive to keep our fees reasonable. We do not want cost to stop you from seeking the legal help you need.
We understand how stressful it can be to face calls from collectors, threats of foreclosure, or the possibility of losing your car. Our lawyers will guide you through each step of the bankruptcy process or other debt-relief options. We tailor our approach to your specific situation and focus on getting you the best possible outcome.
Contact Us for a Free Consultation to Speak with a Bankruptcy Attorney in Florida
For a free consultation with one of our dedicated attorneys, call (877) 241-2200 or contact us online. Our mission is to stand up for consumers and help them navigate the complex world of debt relief and bankruptcy.
Let us be the law firm that helps you fight back, protect your assets, and find the fresh start you deserve. Remember, calling us does not create an attorney-client relationship right away, and we strongly encourage you to discuss your specific circumstances with our team to find the best approach.
Take the first step toward a brighter financial future. Contact us today.
