More individuals and families are filing for bankruptcy. Nonbusiness bankruptcy filings in the US increased 11% over the past year, reaching 594,000 for the 12-month period ending in September.
“A lot of this is just the cumulative weight of year after year of higher prices, higher interest rates,” says Ted Rossman of Money Management International, a nonprofit credit counseling service. “People have depleted savings, they’ve taken on debt, and now some are resorting to bankruptcy.”
The increase coincides with continued financial pressure on household budgets across the country, Rossman says.
Bankruptcy filings have risen steadily in recent years. Since 2022, nonbusiness bankruptcy filings have risen 60 percent, and Rossman expects the trend to continue.
“I think, unfortunately, these bankruptcy numbers are going to continue to grow,” Rossman told Boston 25 News. “There’s a lot of delinquencies already in the pipeline. The New York Fed says that auto loan delinquencies are at their highest point in more than two decades. Credit card delinquencies have been hovering around their highest points in about 15 years.”
While the number of bankruptcies in America may be climbing, Rossman says filings remain well below levels seen during much of the 2000s and early 2010s.
“From 2000 up until about 2012, bankruptcies were way higher than they are now,” Rossman said. “And then they fell in the aftermath of the financial crisis. And then, they really fell during the pandemic.”
If you are experiencing financial hardship and need help bringing debt under control, nonprofit credit counseling organizations may be able to help. Depending on the circumstances, counselors may work with creditors to reduce interest rates and establish a manageable repayment plan.
This is a developing story. Check back for updates as more information becomes available.
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