Bankruptcies in the United States are witnessing a significant surge, affecting a wide range of entities from major corporations to small businesses and individuals. In 2025, large corporate bankruptcies have already escalated to their highest levels in 15 years, indicating a troubling trend in the economic landscape.
The rise in bankruptcies is attributed to mounting financial pressures on consumers and businesses as costs increase, and borrowing conditions tighten. Amy Quackenboss, the executive director of the American Bankruptcy Institute, emphasized that rising costs, stringent credit conditions, and global uncertainties are amplifying the financial strain on households and companies alike.
Interestingly, this current wave of bankruptcies is striking in its reach, impacting various sectors rather than being confined to specific industries. Robert Stark, a bankruptcy attorney, noted that past instances usually saw failures concentrated within particular sectors; however, the present situation is markedly different, showcasing a broad spectrum of industries grappling with financial challenges. Major corporate bankruptcy filings this year have included notable names such as Sonder, Spirit Airlines, Del Monte Foods, Claire’s, and Omnicare, each reporting liabilities exceeding $1 billion.
Data from S&P Global Market Intelligence reveals that bankruptcy filings have surged to 717 by November, surpassing last year’s total of 687. Even without accounting for December figures, 2025 is on track for the highest annual count of large corporate bankruptcies since 2010, when filings reached 828. The industrials sector has been the most affected, with 110 companies filing for bankruptcy, followed by the consumer discretionary sector with 85 filings and healthcare at 46.
The impact of this financial strain isn’t limited to big businesses. Small enterprises are facing their own challenges, with an increase in filings under Subchapter V of Chapter 11—a streamlined process for small firms carrying less than $3 million in debt. This category of bankruptcies has seen over 2,300 filings year-to-date, marking a nearly 10% increase compared to the same period last year. The American Bankruptcy Institute highlighted a notable spike in November, with Subchapter V filings up 23% from 2024.
Moreover, individual bankruptcies have also escalated, reflecting the ongoing financial difficulties faced by many households. Reports show that individual filings jumped by 8% in November 2025 compared to the same month the prior year, with Chapter 7 filings—often referred to as a “clean slate” bankruptcy—increasing by 11%.
Quackenboss pointed out that for many burdened by debt, bankruptcy serves as a vital avenue to regain stability and work towards a more secure financial future. This cycle, while challenging, heralds a phase of potential restructuring and renewal for many affected individuals and corporations, underscoring the resilience present in adversity.