More Americans are turning to personal bankruptcy as household debt becomes harder to manage, according to NPR.
More than 500,000 personal bankruptcies were filed last year, nearly 50% more than three years earlier, NPR reported, citing data from the Administrative Office of the U.S. Courts. Filings at the end of March were up almost 12% from a year earlier.
The increase comes even though bankruptcy filings remain below pre-pandemic levels. Experts told NPR that the trend suggests more consumers are deciding that the financial relief available through bankruptcy outweighs the stigma attached to it.
Bankruptcy proceedings can involve a repayment plan, the sale of certain assets or the discharge of some debts, depending on a person’s circumstances and the type of case. Filing also triggers legal protections that generally stop collection actions while a case is handled in court.
Financial researchers told NPR that credit scores can recover after bankruptcy, although the filing remains part of a person’s credit history. Anyone considering bankruptcy should consult a qualified attorney or nonprofit credit counselor about their own situation; this story is general information, not legal or financial advice.
Source: NPR, July 29, 2026.
