Bankruptcies Are Soaring, Especially Small Businesses And Households

By Mish Shedlock of MishTalk

Sunday, January 4, 2026 11:24 AM EST

Bankruptcies Explode Across the Economy

Business Insider reports Bankruptcies are exploding across the economy, hitting small businesses and households

From corporate giants to mom-and-pop shops, bankruptcies are piling up across the US this year.
Large corporate bankruptcies have hit their highest level in 15 years.
“Bankruptcies seem to be kind of all over the place,” one veteran bankruptcy attorney said.

“Rising costs, tighter credit conditions, and ongoing geopolitical volatility continue to exert pressure on households and businesses already facing financial strain,” Amy Quackenboss, the executive director at the American Bankruptcy Institute, said earlier this month.

Unlike past downturns, this wave of bankruptcies appears to be hitting nearly every corner of the economy. It’s sweeping across a range of sectors in what one veteran bankruptcy attorney described as a strikingly “unusual” pattern.

A wide cross-section of industries

Typically, corporate failures tend to be “industry sticky,” meaning they cluster within the same sectors, Robert Stark, a partner at the law firm Brown Rudnick and chair of its bankruptcy and corporate restructuring practice group, recently told Business Insider.

“Bankruptcies seem to be kind of all over the place,” added Stark, who represents creditor groups in the 2025 bankruptcies of auto parts company First Brands and fintech startup Linqto, as well as the equity committee in the Chapter 11 case of genetic testing company 23andMe.

Stark said that he can’t pinpoint a clear cause for the “broad smattering of industries” now in bankruptcy, but he called it “unusual” in his 30 years of experience and “shockingly so.”

High-profile bankruptcies

Major corporate bankruptcies this year have included hospitality company Sonder, Spirit Airlines, Del Monte Foods, retailer Claire’s, and CVS Health subsidiary Omnicare. Each, in court filings, listed more than $1 billion in liabilities, placing them among the largest bankruptcies of 2025.

According to data from S&P Global Market Intelligence, which tracks public and private companies of a certain size, bankruptcy filings climbed to 717 through November, topping last year’s tally of 687.

Even without December figures, 2025 has already logged the highest annual count for large corporate bankruptcies since 2010, when filings totaled 828, according to S&P Global.

Small business bankruptcies

The spike in bankruptcies extends well beyond the corporate sphere, with an increasing number of small businesses also filing for bankruptcy, data shows.

Personal bankruptcies

In addition to big and small businesses, individual bankruptcies have also increased amid rising costs. Individual bankruptcy filings saw an 8% jump to 40,973 in November 2025, up from the 37,814 filings in November 2024, the data cited by ABI shows.

Last month, there were 25,329 individual filings for Chapter 7, known as “clean slate” or liquidation bankruptcy, up 11% from the 22,871 filings recorded in November 2024.