Did The Bankruptcy Rate Change In 2025?

January of a new year means change, but it also creates the chance to look back at the previous year in aggregate. It seemed like there was a major event that could affect the economy just about every day in 2025. The cost of living soared ever higher as tariffs increased the prices of international goods and set off foreign protests against the United States. Did these economic changes translate to an increase in the rate of bankruptcy filings? And if so, are these trends likely to continue throughout 2026? Read on for more on this subject. If it has you considering your own bankruptcy filing, contact Chapter Bankruptcy Lawyers for your free phone consultation today at 480-405-1010.

Arizona Bankruptcy Statistics

Arizona’s bankruptcy courts have statistics available that make it simple to review data from the last 6 years. While there isn’t much data yet for 2026, now that 2025 is complete, it can be compared to other years going back to 2021. Across all chapters, there were 12,889 bankruptcy filings in Arizona in 2025. This was a 13.7% increase from 2024, when there were 11,340 bankruptcy filings. The bankruptcy rate had increased even more sharply by 18.1% from 2023 to 2024. In 2021, the bankruptcy rate decreased by 26.9%, and then again by 9.4% in 2022. This transition from a decrease in bankruptcy filings to an increase can likely be at least partially attributed to the COVID-19 pandemic. Filings were high during the pandemic, and are increasing back towards those levels. 

Looking at the specific chapters of bankruptcy filed can provide additional insight into bankruptcy statistics. Chapter 7 filings were up 15.2%. Chapter 7 is the most popular form of consumer bankruptcy, but it can also be used by companies looking to liquidate. Chapter 11 filings were also up 15.2%. Like chapter 7 bankrutpcy, chapter 11 can be used by both consumers and corporations, but it is usually only used by business debtors. Chapter 13 filings, which operate almost exclusively as a consumer form of bankruptcy, were only up 7%. 

The National Bankruptcy Rate For 2026 & The Future

Arizona’s changes in the bankruptcy rate aren’t far out of line with the national averages. In 2024, there were 478,752 consumer bankruptcy filings across the United States. This increased by 12% to 533,949 in 2025. Arizona’s consumer bankruptcy rate increased by 13.7%, only 1.7% higher than the national average. Commercial filings increased by 5% nationally between 2024 and 2025. Experts predict that bankruptcy filings will only continue to grow in 2026. The cost of living isn’t going anywhere but up, and the job market has been weak to allow households to find higher-paying jobs to account for inflation. Health insurance premiums are going up, and student loan payments are coming back. All of this eats away at disposable income that could be used to pay off debts. As these changes go into effect, more households will be overwhelmed by both living expenses and debt payments. When this happens, oftentimes the best answer to the problem is filing for bankruptcy protection. 

Bankruptcy Rates During Other Turbulent Financial Times

A few periods in American history stand out as being the most economically tumultuous. In 2007, there were 775,344 consumer bankruptcy filings in the United States. In 2008, the notorious year of the Great Recession, filings increased by 29.5% to 1,004,342. So while a 12% rise in bankruptcy filings in 2025 isn’t great news, it is also less than half of the increase present during the Great Recession of 2008. Surprisingly enough, bankruptcy filings went down during the pandemic. Despite bearing the number 19, the pandemic hit full effect in 2020, but bankruptcy filings decreased by 21.7%. This is due to stimulus checks, eviction moratoriums, and other measures lawmakers put into place to prevent a full economic meltdown. During the Great Depression, bankruptcy rates climbed high and stayed high until World War II. Bankruptcy rates then varied more by state, as they had varying laws regarding creditors’ rights to collection. 

Signs It’s Time To Consider Bankruptcy

There’s no doubt about it- bankruptcy filings are on the rise. Even with more and more people needing debt relief through bankruptcy, many people are still reluctant to file because of the stigma surrounding bankruptcy. But there are many scenarios where bankruptcy is undoubtedly preferable to whatever the debtor is facing, like:

• Constant debt collection calls: Creditors will call seemingly off the hook to try to get a borrow to pay what is owed. This can be annoying, distracting, and even embarrassing issue to encounter. One advantage of hiring an attorney for your bankruptcy case is that creditors should direct all communications about your debts towards your legal counsel once they have been informed of their retainer. Continuing to contact the debtor directly can result in sanctions against the creditor. 
• Receiving a notice of foreclosure sale: In Arizona, a home lender should wait until the homeowner is at least 120 days delinquent on their mortgage payments before initiating home foreclosure proceedings. At this point, the lender can record a notice of sale at least 91 days out, and should provide notice to the homeowner within 5 days. The homeowner will still have about 3 months from this point to address the foreclosure, but shouldn’t procrastinate learning more about bankruptcy and potentially starting the process. Here, a debtor should learn about skeleton bankruptcy petitions if they wait until the final hour before the sale to file. 
• Not being able to juggle bills and debt payments: If you are struggling to keep up with your bills, it’s worth it to sit down and figure out how much of your income is going where. If you would be able to afford your lifestyle if you no longer had to pay back your debts, along with interest and other fees, bankruptcy could clear your obligations with a clean slate. 
• Long-term credit goals: Bankruptcy has a reputation for ruining debtors’ credit. But those who see the worst impact are those who are up-to-date on their debt payments before filing their bankruptcy petitions. Some debtors will see no change in their credit scores after filing for bankruptcy, and some might even see their scores slightly increase. Either way, there is potential for growth after burdensome obligations have been cleared. Responsible credit usage and other strategies can help a post-bankruptcy debtor reach their financial goals. 

Considering Joining The Growing Numbers Filing For Bankruptcy? Start Here With Your Free Consultation. 

Both statewide and nationwide, more households are turning to bankruptcy for debt relief, asset protection, and a second chance at building a positive credit history. You shouldn’t feel alone or ashamed if you are struggling with finances and don’t have a solid plan to get out of debt. Based on your situation, chapter 7 or chapter 13 bankruptcy could be the solution to your financial problems. But it can backfire if filed without the proper care and precision required of such an important legal matter. Want to learn more about the potential bankruptcy has to alleviate your debt issues? Chapter Bankruptcy Lawyers can confirm your bankruptcy eligibility and help you take the first steps towards clearing debt. Schedule your free phone consultation today by calling 480-405-1010.