New Jersey businesses failed at the sixth-highest rate in the country over the past year, and the state posted the second-steepest year-over-year increase in filings anywhere in the nation, according to a new analysis of federal court data released Friday by LendingTree.

The state recorded 93.1 business bankruptcy filings per 100,000 small businesses, placing it behind only Delaware, the District of Columbia, Texas, Nevada and Arkansas. In raw numbers, New Jersey businesses filed 979 bankruptcy petitions against a base of 1,051,630 small businesses statewide — up from 546 filings a year earlier, a jump of 79.3%. Only one state saw a larger percentage increase.

The New Jersey numbers sit inside a national picture that is also deteriorating. Business bankruptcy filings across the United States rose to 25,796 in the 12 months ended March 31, 2026, from 23,154 in the comparable period a year earlier — an increase of 2,642 filings, or 11.4%. Chapter 7 liquidations and Chapter 11 reorganizations together accounted for close to 93% of all business bankruptcies nationwide, meaning the bulk of these cases involved either shutting the doors or attempting a court-supervised restructuring.

The Tri-State Picture

New York was not far behind its neighbor. The Empire State ranked seventh nationally at 88.9 filings per 100,000 small businesses, logging 2,114 business bankruptcies against 2,378,996 small businesses. That places two of the three tri-state economies inside the national top 10 for business failure rates — a signal that the pressures squeezing employers are not confined to one state’s tax or regulatory climate but are running through the entire metropolitan corridor.

Delaware’s position at the top of the table requires a caveat familiar to anyone who has filed incorporation papers. The state recorded 600 filings against 111,346 small businesses, producing a rate of 538.9 per 100,000 — a figure inflated by Delaware’s role as the nation’s corporate registration capital, where a very large number of companies are legally domiciled without operating there. The District of Columbia followed at 147.6 filings per 100,000, with Texas at 129.7, Nevada at 103.2 and Arkansas at 93.9. Rounding out the top 10 behind New York were Louisiana at 86.3, Oklahoma at 83.9 and Mississippi at 80.4.

What Is Driving The Increase

Matt Schulz, chief consumer finance analyst at LendingTree, pointed to a combination of debt loads, borrowing costs and inflation-driven expenses as the likely culprits behind the national increase. He described “higher interest rates, lingering inflation and softer consumer demand” as a difficult mix for many companies. When the cost of borrowing climbs at the same moment customers pull back on spending, Schulz said, businesses operating on narrow margins or carrying meaningful debt frequently run out of maneuvering room.

That description maps closely onto the position of the small and mid-sized firms that make up the backbone of New Jersey’s business community — retailers, restaurants, distributors, contractors and service providers that typically carry floating-rate debt, hold thin cash reserves and have limited ability to pass rising costs to customers without losing volume.

The Methodology

LendingTree examined U.S. Courts bankruptcy filing data for the 12-month periods ending March 31, 2025, and March 31, 2026, counting total business filings across all bankruptcy chapters. To produce comparable state rates, the firm divided each state’s filings by its small-business count as reported in the U.S. Small Business Administration Office of Advocacy’s 2025 state statistics, then multiplied by 100,000. The SBA reports that small businesses represent 99.9% of all U.S. businesses, which makes small-business counts a workable denominator for measuring how exposed a given state is to business failure.

What It Means Going Forward

The rate itself is one measure; the trajectory is another. A 79.3% one-year increase in filings suggests that New Jersey’s ranking reflects an accelerating condition rather than a stable one. If the same rate of increase holds through the next reporting period, the state moves up the table regardless of what happens elsewhere.

For lenders, landlords and suppliers doing business with New Jersey firms, the practical takeaway is that counterparty risk in the state has measurably risen over the past 12 months. For policymakers, the figures land as the state continues to weigh affordability, energy costs and the tax burden carried by employers — the same set of pressures that determine whether a business with a thin margin makes it through the next cycle or joins the filing count.

JBizNews Desk | Trenton, N.J.

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