Business Bankruptcy Filings and Corporate Distress in the US 2026
Business bankruptcy filings across the United States have climbed for four consecutive years, and the most recent data through early 2026 shows that trend accelerating rather than leveling off. According to the Administrative Office of the U.S. Courts, business filings rose 11.4% in the twelve months ending March 31, 2026, continuing a steady climb from the two-decade low reached in mid-2022. Chapter 11 filings specifically reached a 10-year high in 2025, and a handful of sectors, real estate, consumer goods, and energy and industrial companies, accounted for the overwhelming majority of that activity.
This article covers the full range of business bankruptcy statistics shaping the US corporate landscape in 2026, from total filing volume and Chapter 11 trends to Subchapter V small-business reorganizations, the industries driving distress, state-level patterns, and pending legislative changes to the bankruptcy code. Every figure below reflects the most current data available as of 2026, offering a grounded picture of how financial distress is spreading across American businesses right now.
Interesting Facts About Business Bankruptcy in the US 2026
| Fact | Figure (2026) |
|---|---|
| Business filings, 12 months ending March 2026 | 25,960, up 11.4% |
| Business filings, 12 months ending Dec 2025 | 24,737, up 7.1% |
| Total bankruptcy filings (all types), 2025 | 574,314, up 11% |
| Chapter 11 filings, 2025 | 10-year high |
| Consecutive years of rising filings | 4 (2022–2025) |
| 20-year low point in filings | 380,634 total (June 2022) |
| Sectors driving 80% of 2025 Chapter 11 filings | Real estate, consumer goods, energy/industrial |
| Commercial Chapter 11 filings, April 2026 vs 2025 | up 42% year-over-year |
| Subchapter V elections, 2025 | 2,446, up 11% from 2024 |
| Loan defaults/distressed exchanges, 2025 | 4.3% of all issuers |
Source: Administrative Office of the U.S. Courts, Epiq Bankruptcy Analytics, PwC
The trajectory in business bankruptcy data is unambiguous: filings have risen every quarter for nearly four years straight. Business filings reached 25,960 in the twelve months ending March 2026, up 11.4% from the prior year, extending a climb that began after filings bottomed out at a two-decade low of 380,634 total bankruptcies, business and non-business combined, in June 2022. Chapter 11 activity has been particularly pronounced, hitting a 10-year high in 2025, with commercial Chapter 11 filings up 42% year-over-year as of April 2026.
Much of that distress is concentrated rather than evenly spread across the economy. Just three sectors, real estate, consumer goods, and energy and industrial companies, accounted for 80% of all Chapter 11 filings in 2025, a concentration researchers attribute more to the sheer size of those industries than to any single widespread structural problem. Smaller businesses have their own dedicated track record too: Subchapter V elections, the streamlined reorganization path created for small businesses, rose 11% in 2025 to 2,446 filings, while broader loan default and distressed exchange rates climbed to 4.3% of all corporate issuers, still well above the 2%–3% range typical before the pandemic.
1. Total Business Bankruptcy Filings in the US 2026
Business Bankruptcy Filings (12-Month Totals)
Year ending Dec 2024 |███████████████████████████████ 23,107
Year ending Dec 2025 |███████████████████████████████████ 24,737
Year ending Mar 2026 |████████████████████████████████████ 25,960
| Period | Business Filings | Change |
|---|---|---|
| 12 months ending Dec 31, 2024 | 23,107 | Baseline |
| 12 months ending Dec 31, 2025 | 24,737 | +7.1% |
| 12 months ending March 31, 2025 | 23,309 | — |
| 12 months ending March 31, 2026 | 25,960 | +11.4% |
Source: Administrative Office of the U.S. Courts
The Administrative Office of the U.S. Courts, the official body that compiles nationwide bankruptcy data, reported 24,737 business bankruptcy filings for the twelve months ending December 31, 2025, up 7.1% from 23,107 the year before. The most recent quarterly update, covering the twelve months ending March 31, 2026, shows that pace accelerating further, with business filings reaching 25,960, an 11.4% increase over the 23,309 filings recorded in the same period a year earlier. The Courts release these rolling twelve-month totals four times annually, giving a consistent, comparable read on the trend each quarter.
This acceleration in business filings has occurred alongside an even sharper rise in non-business, or consumer, filings, which climbed 11.9% to 565,890 over the same twelve-month period ending March 2026. Amy Quackenboss, executive director of the American Bankruptcy Institute, has pointed to mounting economic pressure on both households and businesses as the underlying driver, and total filings across all categories, business and non-business combined, remain well below the historical peak of nearly 1.6 million reached in September 2010, even as the current four-year upward trend shows no clear sign of reversing.
2. Business Bankruptcy Trends Since the Pandemic in the US 2026
Total Bankruptcy Filings, Selected Years
2019 (pre-COVID) |███████████████████████████████████ 774,940
2022 (low point) |██████████████████ 387,721
2025 |███████████████████████████ 574,314
| Year | Total Filings (All Types) | Notes |
|---|---|---|
| 2019 | 774,940 | Pre-pandemic baseline |
| 2020 | ~30% lower than 2019 | COVID relief suppressed filings |
| 2022 | 387,721 | 20-year low point |
| 2023 | 452,990 | Filings begin rising |
| 2024 | 517,308 | +14.2% from 2023 |
| 2025 | 574,314 | +11% from 2024, +26.8% from 2023 |
Source: Administrative Office of the U.S. Courts
The pandemic created an unusual, temporary suppression in bankruptcy filings that has since fully unwound. Total filings stood at 774,940 in 2019, then dropped roughly 30% in 2020 as emergency relief programs, eviction moratoriums, and loan forbearance kept financially distressed businesses and households out of court. That suppression persisted through 2021 and into 2022, when total filings bottomed out at just 387,721 for the full year and hit an even lower rolling twelve-month trough of 380,634 in June 2022, the lowest level in roughly two decades.
Since that mid-2022 low point, filings have risen every single quarter without exception. Total filings climbed to 452,990 in 2023, then 517,308 in 2024, and 574,314 in 2025, a 26.8% increase over just two years. That steady, uninterrupted climb reflects the gradual expiration of pandemic-era relief measures combined with sustained pressure from elevated interest rates, persistent inflation in input costs, and, according to industry analysts, a growing backlog of financially strained businesses that relief programs had merely delayed from filing rather than genuinely fixed.
3. Chapter 11 Bankruptcy Filings in the US 2026
Commercial Chapter 11 Filings, April 2026 vs April 2025
April 2025 |███████████████████████████ baseline
April 2026 |███████████████████████████████████████ +42% YoY
| Chapter 11 Metric | Figure |
|---|---|
| 2025 Chapter 11 filing level | 10-year high |
| Commercial Chapter 11 filings, April 2026 vs 2025 | +42% year-over-year |
| Commercial Chapter 11s, April 2026 vs March 2026 | -2% (645 vs 658) |
| Share of 2025 filings from top 3 sectors | 80% |
| Loan defaults/distressed exchanges, 2025 | 4.3% of issuers |
Source: Epiq Bankruptcy Analytics, American Bankruptcy Institute, PwC
Chapter 11, the reorganization chapter typically used by larger businesses and corporations with enough assets or revenue to keep operating through the process, reached its highest filing level in a decade during 2025, according to restructuring analysis from PwC. That elevated pace has continued into 2026: data compiled by Epiq Bankruptcy Analytics in partnership with the American Bankruptcy Institute shows commercial Chapter 11 filings up 42% year-over-year as of April 2026, even though the April total actually dipped slightly, by 2%, compared with the previous month, suggesting a high but somewhat volatile monthly filing pace rather than a smooth, continuously accelerating trend.
PwC’s restructuring outlook attributes the elevated Chapter 11 volume less to a widespread crisis across the economy than to the sheer scale of a handful of large sectors. Real estate, consumer goods, and energy and industrial companies together accounted for 80% of all Chapter 11 filings in 2025, driven substantially by commercial real estate distress tied to elevated interest rates and lasting disruption from remote-work trends. Loan defaults and distressed debt exchanges across all corporate issuers averaged 4.3% in 2025, essentially unchanged from 2024 but still meaningfully above the 2% to 3% range considered typical before the pandemic.
4. Subchapter V Small Business Bankruptcy Filings in the US 2026
Subchapter V Elections, Year-Over-Year Growth
2024 total |███████████████████████████████ 2,202
2025 total |███████████████████████████████████ 2,446 (+11%)
January 2026 |███████████████████████████████████████ +68% YoY
| Subchapter V Metric | Figure |
|---|---|
| 2024 total elections | 2,202 |
| 2025 total elections | 2,446, up 11% |
| January 2026 elections | 255, up 68% year-over-year |
| December 2025 elections | up 36% year-over-year |
| May 2026 elections | 281, up 36% from 207 in May 2025 |
Source: Epiq Bankruptcy Analytics, American Bankruptcy Institute
Subchapter V, a streamlined Chapter 11 reorganization track created specifically for small businesses, has seen some of the sharpest percentage growth of any bankruptcy category tracked. Total elections rose 11% in 2025 to 2,446, up from 2,202 the year before, and that momentum has carried directly into 2026: January 2026 saw Subchapter V elections spike to 255, a 68% jump compared with January 2025, following a 36% year-over-year increase in December 2025 that suggested the acceleration was already building before the calendar turned. May 2026 data continued the pattern, with 281 elections, up 36% from 207 in May 2025.
The rapid growth in Subchapter V usage reflects both genuine small-business distress and the program’s growing popularity as an efficient alternative to full Chapter 11, since it allows small business owners to retain equity in their company without a creditors’ committee and typically resolves faster and at lower legal cost than standard Chapter 11 proceedings. That popularity is now shaping legislative debate in Washington, since the program’s current debt eligibility ceiling has increasingly become a binding constraint for mid-sized small businesses whose total debt load exceeds the threshold needed to qualify for the streamlined process.
5. Business Bankruptcy by State in the US 2026
Bankruptcy Filings Per 100,000 Residents, 2025
Georgia |██████████████████████████████████████ 285 per 100,000
California |███████████████████ 139 per 100,000
| State | Total Filings (2025) | Per 100,000 Residents |
|---|---|---|
| California | 54,783, most of any state | 139 |
| Georgia | 32,222, 4th-highest total | 285, highest rate among top states |
| Alaska | 244, one of the fewest | Very low rate |
Source: Administrative Office of the U.S. Courts, Debt.org analysis of Census population data
Raw filing totals and per-capita filing rates tell noticeably different stories about where bankruptcy pressure is concentrated. California recorded the most total bankruptcy filings of any state in 2025 at 54,783, but given its population of roughly 39.4 million, that works out to a comparatively modest rate of about 139 filings per 100,000 residents. Georgia, by contrast, had the fourth-highest total filing count at 32,222, but with a much smaller population of around 11.3 million, its per-capita rate reaches 285 filings per 100,000 residents, roughly double California’s rate despite having far fewer total filings.
At the opposite end of the spectrum, Alaska recorded just 244 total bankruptcy filings in 2025, one of the lowest totals of any state, reflecting both its small population and, potentially, differences in state-level bankruptcy exemption laws that can make filing more or less advantageous depending on where a business or individual is located. This state-by-state variation underscores a broader point in bankruptcy data: national totals and growth rates, while useful for tracking the overall economic trend, can obscure meaningfully different local realities shaped by regional economic conditions, industry concentration, and each state’s own legal exemption framework.
6. Industries Driving Business Bankruptcy in the US 2026
Share of 2025 Chapter 11 Filings by Sector Group
Real estate, consumer goods, energy/industrial |████████████████████████████████████████ 80%
All other sectors combined |██████████ 20%
| Sector | Share of 2025 Chapter 11 Filings |
|---|---|
| Real estate | Part of the 80% combined total |
| Consumer goods | Part of the 80% combined total |
| Energy and industrial | Part of the 80% combined total |
| All other sectors combined | 20% |
Source: PwC Restructuring and Bankruptcy Outlook 2026
PwC’s 2026 restructuring outlook identifies just three broad sector groups, real estate, consumer goods, and energy and industrial companies, as responsible for a striking 80% of all Chapter 11 filings in 2025. Commercial real estate has been a particularly persistent source of distress, driven by a structural combination of elevated interest rates making refinancing far more expensive than during the previous decade’s low-rate environment, and lasting reductions in office demand tied to work-from-home trends that have depressed valuations and occupancy across large swaths of the office and retail property sectors.
Importantly, PwC’s analysts caution that this concentration reflects the sheer size of these industries relative to the broader economy rather than evidence of acute, industry-specific crises. Excluding real estate bankruptcies, which tend to involve smaller, single-asset filings rather than large operating companies, overall restructuring activity actually trended only slightly higher than in recent years, suggesting that outside of the real estate sector specifically, corporate distress has been rising gradually rather than spiking sharply. Looking ahead, tariff policy has emerged as a fresh disruptive variable for 2026, weighing on input costs and complicating margin planning particularly for consumer products and industrial companies already navigating the current elevated-filing environment.
7. Loan Defaults and Out-of-Court Restructuring in the US 2026
Loan Default and Distressed Exchange Rate
Pre-pandemic average |███████████████ 2%-3%
2025 rate |████████████████████████████ 4.3%
| Credit Distress Metric | Figure |
|---|---|
| Loan default/distressed exchange rate, 2025 | 4.3% of all issuers |
| Loan default/distressed exchange rate, 2024 | 4.3%, essentially unchanged |
| Pre-pandemic typical range | 2%–3% |
| Trend in out-of-court restructuring | Increasingly popular as a lower-cost alternative |
Source: PwC Restructuring and Bankruptcy Outlook 2026
Beyond formal bankruptcy filings, a growing share of corporate financial distress in the US is being resolved outside the courtroom entirely. PwC reports that loan defaults, including distressed debt exchanges, averaged 4.3% of all corporate issuers in 2025, unchanged from 2024 but still meaningfully elevated compared with the 2% to 3% range that was typical before the pandemic, indicating that underlying credit stress across corporate America has settled at a permanently higher baseline rather than fully normalizing.
Out-of-court restructuring, including so-called liability management exercises, has become an increasingly common tool for companies looking to avoid the cost and disruption of a formal bankruptcy filing altogether. These transactions can meaningfully lower restructuring costs and shorten timelines compared with an in-court Chapter 11 process, but PwC cautions they work best when paired with genuine operational fixes, since balance-sheet-only engineering that doesn’t address the underlying performance problems tends to simply delay a more disruptive restructuring rather than prevent one, particularly for companies facing structural rather than temporary financial pressure.
8. Monthly Commercial Bankruptcy Filing Trends in the US 2026
April 2026 Filing Categories, Month-over-Month Change
Commercial filings overall |████ +4%
Subchapter V elections |██████████████ +12%
Commercial Chapter 11 |▼▼ -2%
Individual Chapter 7 |▼▼▼▼ -4%
| April 2026 Category | Change vs March 2026 |
|---|---|
| Commercial filings overall | +4% |
| Subchapter V elections | +12% |
| Commercial Chapter 11 | -2% |
| Individual Chapter 7 | -4% |
| Individual Chapter 13 | -3% |
| Chapter 12 (family farmers/fishermen) | +82% |
Source: Epiq Bankruptcy Analytics, American Bankruptcy Institute
Monthly bankruptcy data compiled by Epiq Bankruptcy Analytics shows meaningful volatility beneath the broader upward annual trend. In April 2026, overall commercial filings rose 4% compared with March, and Subchapter V elections climbed 12% over the same one-month period, while commercial Chapter 11 filings specifically actually fell 2%, and individual Chapter 7 and Chapter 13 filings both declined slightly, by 4% and 3% respectively. Chapter 12, the specialized reorganization chapter for family farmers and fishermen, jumped 82% month-over-month, though from a small base that makes the percentage swing more dramatic than the underlying filing count.
Michael Hunter, Vice President of Epiq AACER, has linked the broader rise in filings to persistent pressure in consumer credit markets, noting that auto loan delinquencies remain near 15-year highs and that foreclosure filings surged 26% in the first quarter of 2026 alone. While that specific commentary centers on individual and consumer filings rather than business bankruptcy directly, the same macroeconomic pressures, elevated borrowing costs, sustained inflation, and cooling consumer spending, are widely cited by restructuring professionals as contributing factors behind the parallel rise in business filings, since consumer-facing small businesses in particular tend to feel the effects of tighter household budgets fairly directly.
9. Bankruptcy Law Reform and the 2026 Legislative Outlook
Proposed Subchapter V Debt Eligibility Increase
Current limit (approximate) |████████████████ ~$7.5M proposed ceiling
| Legislative Proposal | Detail |
|---|---|
| Bill name | Bankruptcy Threshold Adjustment Act of 2026 |
| Sponsor (Senate) | Sen. Chuck Grassley (R-Iowa) |
| Companion bill (House) | Rep. Ben Cline (R-Va.), reported out of House Judiciary Committee |
| Proposed Subchapter V debt ceiling | $7.5 million |
| Proposed individual Chapter 13 debt ceiling | $2.75 million |
Source: American Bankruptcy Institute, Epiq Bankruptcy Analytics
With bankruptcy filings rising across nearly every category, momentum has been building in Congress to permanently expand access to the bankruptcy system’s more efficient reorganization tracks. The Bankruptcy Threshold Adjustment Act of 2026, introduced by Senator Chuck Grassley of Iowa and paired with a companion bill from Representative Ben Cline of Virginia that has already been reported out of the House Judiciary Committee, would raise the debt eligibility limit for small businesses using Subchapter V to $7.5 million, up from the current, increasingly binding ceiling that has left a growing number of mid-sized distressed businesses unable to access the streamlined process.
The same legislation would also raise the debt limit for individual Chapter 13 filings to $2.75 million and eliminate the current distinction between secured and unsecured debt when calculating that limit, changes the American Bankruptcy Institute has publicly supported as necessary to keep pace with rising debt loads across both business and consumer bankruptcy cases. Amy Quackenboss of the ABI has specifically highlighted the growing momentum behind these changes, framing them as a necessary modernization of debt thresholds that were last meaningfully updated years before the current wave of elevated interest rates and post-pandemic debt accumulation reshaped the financial profile of a typical distressed small business.
Disclaimer: The data research report we present here is based on information found from various sources. We are not liable for any financial loss, errors, or damages of any kind that may result from the use of the information herein. We acknowledge that though we try to report accurately, we cannot verify the absolute facts of everything that has been represented.
