Chapter 7 bankruptcy filings by Americans rose by 16 percent year over year to hit 30,961 filings in April, the American Bankruptcy Institute (ABI) said in a May 2 statement.
Total bankruptcy filings, which include submissions from both individuals and businesses, were up by 9 percent on an annual basis.
When an individual resorts to Chapter 7 bankruptcy, the court assesses the value of his or her assets and sells them to pay off as many outstanding debts as possible. Any remaining debt is canceled. The individual gets to keep some of the assets that were exempted from the process.
“The 9 percent increase in total bankruptcy filings in April 2025, particularly the 16 percent surge in individual chapter 7 filings, reflects the mounting financial strain on households, elevated prices, and higher borrowing costs,” Michael Hunter, vice president of bankruptcy data provider Epiq AACER, said in a statement….