Commercial Chapter 11 Bankruptcies Surge in July, Marking Sharp Year-Over-Year Rise

The latest data from Epiq AACER reveals a striking surge in commercial bankruptcy activity, signaling mounting financial strain among U.S. businesses. In July 2025, there were an estimated 911 commercial Chapter 11 filings a staggering 78% increase compared to the 512 cases filed in July 2024.

When looking at the broader picture, total commercial bankruptcy filings climbed to 2,997 for the month, representing a 26% rise from last year’s July total of 2,371. Within that number, small business bankruptcies, tracked as Subchapter V elections under Chapter 11, saw a roughly 30% jump, rising from 159 filings in July 2024 to 206 filings this year.

Bankruptcy Activity Expands Across the Board

The surge wasn’t limited to the commercial sector. Total U.S. bankruptcy filings commercial and noncommercial combined hit 49,614 in July, up 12% from the 44,452 recorded in the same month last year. On the consumer side, noncommercial filings reached 46,617, an 11% increase from July 2024’s 42,081.

• Chapter 7 consumer bankruptcies rose 13%, climbing from 25,716 to 29,122.
• Chapter 13 filings advanced 7%, from 16,303 to 17,392.

These figures point to a steady climb toward pre-pandemic bankruptcy levels after several years of historically low filing rates.

Economic Pressures Fuel the Spike

As expected, we continue to see strong demand from both consumers and businesses seeking bankruptcy protection, with double-digit percentage increases year-over-year particularly notable in commercial filings,” said Michael Hunter, VP at Epiq AACER.

Hunter attributes the upward trend to a convergence of economic challenges, including:

• Persistently high interest rates
• Elevated inflation levels
• Record household debt
• Rising loan delinquencies
• Ongoing geopolitical instability

He predicts filing activity will continue rising through the rest of 2025 and into 2026, barring a major shift in economic conditions.

Month-to-Month Trends Show Even Sharper Increases

The July commercial Chapter 11 tally also marked a 46% jump from June 2025, when 626 cases were filed. Overall commercial filings increased by 15% month-over-month, from 2,601 in June to 2,997 in July.

Interestingly, small business Subchapter V filings actually dipped 2% from June’s 211 to July’s 206 suggesting that while large-scale corporate bankruptcies are accelerating, the pace of small business restructurings has temporarily eased.

For consumers, the trend is similar. July’s 49,614 total filings represented a 7% increase from June’s 46,239. Noncommercial bankruptcies rose 7% from 43,638 the month prior. Chapter 7 cases increased by the same 7% over June’s 27,213, while Chapter 13 filings mirrored that growth from June’s 16,307.

Calls for Legislative Action

According to Amy Quackenboss, Executive Director of the American Bankruptcy Institute (ABI), the data underscores the pressure households and companies face from high borrowing costs, persistent inflation, and global instability.

“We appreciate the attention of Congress to re-establish higher debt thresholds for Subchapter V and Chapter 13 to provide greater access for struggling small businesses and consumers trying to achieve a financial fresh start,” Quackenboss said.

Lawmakers have already taken interest. On July 15, the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust held a hearing titled “Bankruptcy Law: Overview and Legislative Reforms.” There, bipartisan support emerged for restoring the expanded debt-eligibility limits for Subchapter V and Chapter 13 levels that had lapsed following last year’s statutory sunset.

Outlook for the Remainder of 2025

With commercial bankruptcies sharply outpacing last year’s pace and consumer filings steadily increasing, bankruptcy professionals expect continued growth in case volumes. The combination of tight credit conditions, inflationary pressures, and sluggish economic growth is likely to keep financially distressed businesses and individuals seeking relief under U.S. bankruptcy laws.

If Congress moves forward on reforms, small businesses and consumers may soon find it easier to qualify for bankruptcy protections designed to streamline restructurings and debt discharges potentially reshaping the landscape of filings in 2026 and beyond. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.