Americans and businesses filed 469,719 bankruptcy cases in the first nine months of 2026, an 11% jump over the same stretch last year, according to bankruptcy data firm Epiq AACER and the American Bankruptcy Institute.

Put simply, for every 10 bankruptcy cases filed through September of last year, about 11 were filed this year. That works out to roughly 1,700 new cases every single day, including weekends.

Most of the pain is landing on households. Individuals filed 444,252 cases through September, nearly 45,000 more than the 399,379 a year earlier.

The fastest-growing type is the kind people use when they have nothing left to work with. Individual Chapter 7 filings, where a court wipes out most debts and a trustee can sell off assets to pay creditors, rose 13% to 282,413. Chapter 13 filings, where people keep their home or car and pay creditors back over three to five years under a court-approved plan, rose 8% to 160,817.

That split matters. More people choosing the wipe-it-out route over the payback route is a sign that more households have no realistic way to catch up on what they owe.

Michael Hunter, vice president of Epiq AACER, blamed the rise on “higher borrowing costs, rising household expenses, growing consumer delinquencies, and a softer job market.” In everyday terms, credit card and loan bills are costing more each month, groceries and fuel are eating more of the paycheck, more people are falling behind on payments, and new jobs are harder to find.

Small businesses are getting hit even harder by percentage. Filings under a streamlined small-business bankruptcy option, known as Subchapter V, jumped 46% to 2,442, up from 1,672 a year earlier. That is roughly three small businesses filing this year for every two that filed last year. The option lets a smaller company restructure its debts faster and more cheaply than a full corporate bankruptcy, so the owner can keep the doors open, keep workers on payroll and pay creditors over time instead of shutting down.

Overall commercial filings rose 7% to 25,467, and commercial Chapter 11 cases, the reorganization route used by larger companies, rose 11% to 6,560.

September alone showed the trend holding. Total filings for the month reached 52,299, up 6% from September 2025. Individual filings rose 7% to 49,672, and small-business Subchapter V filings rose 38% to 276. Commercial filings for the month fell 7% to 2,627, though the year-ago figure was inflated by 109 related filings from a single long-term care pharmacy company.

The climb is not new. Total bankruptcy filings in calendar year 2025 were 565,759, an 11% increase from 2024. Epiq expects filing volumes to keep rising into 2027.

There is a fix moving through Washington aimed at making relief easier to reach. The Senate passed the Bankruptcy Threshold Adjustment Act by unanimous consent in late September, and the bill now goes to the president for his signature. The measure, sponsored by Rep. Ben Cline of Virginia, permanently raises the debt limit for small businesses using the streamlined option to $7.5 million. It also raises the debt limit for individual Chapter 13 filings to $2.75 million and drops the old rule that counted secured and unsecured debt separately.

Here is what that means in plain terms. A small business owing more than about $3.4 million is currently shut out of the faster, cheaper small-business route. The bill would more than double that ceiling, letting more family-owned shops, restaurants and contractors restructure instead of liquidating. For households, the higher Chapter 13 limit would let more families with large mortgages or medical and business debts use a repayment plan to keep their homes rather than being pushed toward losing them.

The small-business limit had been set at $7.5 million during the pandemic before it lapsed, so the bill would restore that higher ceiling and make it permanent. ABI Executive Director Amy Quackenboss said the legislation would expand access for struggling businesses and families seeking relief.

The bill would apply to cases filed on or after the day it becomes law.

JBizNews Desk | New York

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