Bankruptcies increase 11.9 percent

https://www.uscourts.gov/data-news/judiciary-news/2026/04/23/bankruptcies-increase-119-percent

by jaredwiener • 3 months ago

193 122 3 months ago

Steadily increasing for five years

morkalork• 3 months ago

An interesting analysis would be to see how many and how often these posts of social order/societal breakdowns are making it to the FP here over time.

kevin_nisbet• 3 months ago

The tables in the link do a good job of outlining this, 11.9% while an interesting headline number, 11.9% increase over nothing is still basically nothing.

However, with the tables going back to 2022, it's almost 100% increase of businesses and 50% increase for Non-business filings, which I find more interesting.

Would be great to see the totals as population adjusted against historical context though.

cman1444• 3 months ago

Still not very high by historical standards. In fact, it really just seems like we're approaching the pre-pandemic norm.

https://www.congress.gov/crs-product/IN12536

nippoo• 3 months ago

I can't find the original source, but I remember reading a study showing that this rise was closely correlated to states which had legalised or loosened laws on gambling!

gwbas1c2• 3 months ago

Having recently seen a thread here where a lot of people threw a lot of shade on gambling: I really recommend finding that source.

That being said: I'm more likely to believe inflation to be the cause; and I think it's a bad idea to use this to fan moral panic

john_strinlai4• 3 months ago

I'm more likely to believe inflation to be the cause

based on what?

kamikazeturtles• 3 months ago

In states that allowed online betting, the study reported a 10% increase in the likelihood of bankruptcy and an 8% increase in debt collection amounts — outcomes that tended to appear about two years after the practice was legalized.

https://www.npr.org/2026/04/04/nx-s1-5773354/legal-sports-be...

sciencesama• 3 months ago

kalashi is coming

tibbydudeza• 3 months ago

The old adage of bread and circuses ?.

EA-3167• 3 months ago

Not to mention fools and their money parting.

mc32• 3 months ago

TV and social media have been the modern bread and circuses for a while now. Gambling continues to be a vice.

artursapek• 3 months ago

It's so disgusting watching how much sports gambling and "prediction markets" have exploded in recent years

estearum6• 3 months ago

IMO prediction markets are an interesting tool but you can just ban sports gambling and keep 100% of their value and remove 90% of their downsides.

ryandrake2• 3 months ago

I'd argue that, while a portion of this rise obviously consists of troubled/problem/addicted gamblers, a huge part of the rise of gambling is from desperation: The public's growing belief that the traditional wealth-producing ladders have all been pulled up, and that gambling is the last remaining hope that normal people have of making decent money.

"Work hard all your life and retire with a pension." - fantasy in 2026.

"Invent something new and capitalize on it." - not realistic in the face of gigantic, powerful, all-owning corporations who will squash you.

"Buy an existing business and live off the proceeds." - impossible without existing wealth.

"Become a famous pop star or sports hero." - as improbable as ever.

People have no hope anymore, and hopeless people turn to random chance as the last and only remaining option.

wslh• 3 months ago

Are there markets where people can bet on bankruptcy rates too? Gambling increases bankruptcies, and then people gamble on the bankruptcies.

boringg• 3 months ago

Double or nothing!

silverlyra• 3 months ago

after word spreads of easy pickings, funds swell into bankruptcy rate contracts. the success stabilizes average losses across Kalshi portfolios; the bankruptcy rate falls.

after smart money then moves to predicting the period of the oscillations, …

mrbombastic• 3 months ago

Relevant snl skit: https://youtu.be/wXZNuwY_5-U

malux852• 3 months ago

I can see the potential link there, but my intuition says that the SKYROCKETING cost of living is probably more to blame.

cybercatgurrl• 3 months ago

i think you mean the ever increasing greed of the 1%

pseudohadamard• 3 months ago

I think it saw that here, https://www.tylervigen.com/spurious-correlations

throwaway274483• 3 months ago

Are we the first state to openly care more about our rich than the people who live here?

felipellrocha• 3 months ago

Not by far

bensyverson• 3 months ago

No, but historically speaking, the societies that operate this way tend to invite revolution

mothballed6• 3 months ago

Bankruptcy won't even discharge the kind of debt many/most of the lower-middle class fall broke upon. Alimony, child support, student loans, "restitution."

austin-cheney• 3 months ago

Kind of. I want to yes, but its not directly how this works or how it sounds. A large increase in poverty or loss of property is insufficient to stoke revolution on its own. The increase of poverty in favor of the rich devastates the economy for multiple reasons, such as: opportunity contraction, less spending, loss of motivation/mobility, and more. When the economy loss becomes wide spread enough, regardless of bankruptcy/poverty/homeless or whatever rates is when revolution happens.

The problem has to effect a majority of society. 12% sounds devastating (it is), but it is not a wide enough umbrella.

vjvjvjvjghv• 3 months ago

That has been pretty normal throughout history. Caring about non-rich people has been pretty rare.

throwaway274483• 3 months ago

Sure, but states typically at least pretend and allege to benefit their constituents. We haven't tried to do that since at least reagan.

vkou2• 3 months ago

It should be obvious that the answer is no. So obvious that I'm not sure why the question is even being asked.

john_strinlai4• 3 months ago

So obvious that I'm not sure why the question is even being asked.

its a rhetorical question.

the question is asked to make a point rather than to be answered.

RobotToaster• 3 months ago

That's possibly every state in the last 400 years, with the possible exception of the soviet union and Maoist China, and those exceptions are arguably just a technicality.

throwaway274483• 3 months ago

Maoist china certainly and famously murdered many rich people. It's true that the state that emerged had deep corruption and that life remained difficult for the poor, but murdering rich people is an allegation difficult to deny.

ryandrake2• 3 months ago

I think what's different is that we actually have democracy, yet for whatever reason, the masses of poor people keep voting for governments that overtly and openly only care about rich people.

rdevilla• 3 months ago

You forget the French, who inspired Marx's exhortations to practice "revolutionary terror," the "only way," [0] with their own public executions of the rich [1].

[0] https://www.marxists.org/archive/marx/works/1848/11/06.htm

[1] https://en.wikipedia.org/wiki/Reign_of_Terror

globular-toast• 3 months ago

No but maybe the first state with a constitution that is supposed to stop that kind of thing happening again.

dgellow• 3 months ago

Definitely not?

stevefan1999• 3 months ago

And no wonder why the job market is so booming right now because there are less companies alive and more people got laid off, thus shrinking demand and increasing supply in workforce recruiting. We all have to thank Trump and Anthropic/OpenAI/blah-blah-blah for this win-win situation.

I hope there are jobs for company liquidators though it is usually the job of a junior solicitor/lawyer I reckon, as they will certainly have more demands amid this bankruptcy wave

lgleason• 3 months ago

Got to love that golden age.

cdrnsf• 3 months ago

There's no reason to believe this will reverse or improve under the current administration. Grifting is celebrated and policy is decided by and for the wealthy. Meanwhile, tech leaders are promising even more job losses spurred by AI.

htx80nerd• 3 months ago

Friendly reminder the US Gov printed ~4 trillion dollars during the Covid years.

AirMax982• 3 months ago

I actually don't understand how this would affect bankruptcies — why?

altcognito2• 3 months ago

I don't know if this is his point, but a decent amount of cash went to individuals as part of Covid relief in different forms, and this caused a delay in bankruptcies because people were able to pay their bills. Pick your moral quandry.

postalrat• 3 months ago

Businesses focused more on seeking out easy government money than building good products.

rglover• 3 months ago

Speculation/personal read on this.

1. A lot of companies got used to ZIRP money (not to mention the trickle-down effect to the rest of the economy).

2. The COVID printing spree/helicopter money had a knock-on effect of rising inflation (more dollars/demand competing for the same resources, or less). That was made even worse by tariff fluctuations.

3. The delta between revenue/investment money vs. cost increases relative to inflation likely exceeded the threshold for these companies to stay solvent (or to make it worth it to keep the business operational).

john_strinlai4• 3 months ago

feel free to elaborate on the relationship you are drawing between that and the article

altcognito2• 3 months ago

Was higher prior to Covid, we are just reverting to the prior situation.

https://www.debt.org/bankruptcy/statistics/

sheikhnbake• 3 months ago

Is this what they meant by a return to normalcy?

ilamont2• 3 months ago

I can't speak for bankruptcy filings, but I've sat through small claims sessions on a few occasions and probably half are for credit card debt. Most of the time the defendant doesn't show and assuming the bank wins, damages can be trebled in my state.

And: Credit card rates are way, way up compared to just a few years ago. Earlier this year WSJ reported average APRs in the US were over 24% (https://www.wsj.com/finance/banking/the-credit-card-rate-cap...). Most people do not read the fine print on their credit card applications, or compare them to what rates used to be like.

Loughla• 3 months ago

What good would it do to compare rates to what they used to be?

egypturnash• 3 months ago

Your mom: Why don't you have a credit card? It helped me so much when I was in your situation.

You, a young adult who doesn't check: I'll get one! runs up debt with an interest rate 4x what your mom had to deal with thirty years ago HELP I'M SUPER BROKE AND BANKRUPTCY IS A LOT HARDER THAN IT WAS THIRTY YEARS AGO TOO

You, a young adult who checks: The interest rates are 4x what they were when I was in your situation. This looks like a much shittier deal than it was for you.

ilamont2• 3 months ago

If you've had credit cards in the past, your minimum payments and debt servicing will be a lot more expensive than before.

munificent• 3 months ago

I wonder if there's a death spiral there:

1. Economy gets worse and some people are no longer able to keep up with their credit card payments. They default.

2. Credit cards increase rates to compensate for the increased risk since a greater fraction of their users are failing to pay.

3. People who are financially stable and literate see the increased rates and put fewer things on credit.

4. The remaining pool of people using credit now has an even greater fraction of people who aren't financially solid.

5. Go to 1.

yurishimo• 3 months ago

This is a good theory.

If anyone is wondering how to escape this cycle, the solution is pretty straightforward; don’t buy things you cannot afford with cash/debit.

If putting your credit card balance on autopay is scary to you, you probably shouldn’t have a credit card. Also, having a credit card doesn’t mean you can ignore the charges and settle up at the end of the month. Credit is a tool that can be abused and misused like any other tool.

Personally, I’m anti credit in general and don’t have credit cards or a credit score. But I also moved to Europe where credit is not nearly as important as when i lived in the US.

gizmo686• 3 months ago

I think the death spiral breaks at step 3. Financially stable and literate people do not pay credit card interest. They pay off the full balance every month resulting in 0 interest payments. In cases where they need credit beyond the short term float the above gives you, they have access to lower interest loans.

These people also don't make the cards much money, so loosing them wouldn't have that much of an effect anyway.

quickthrowman• 3 months ago

3. People who are financially stable and literate see the increased rates and put fewer things on credit.

Financially stable and literate people don’t pay credit card interest at all.

Credit cards are useful for fraud protection and rewards, the people that use them to finance purchases at 24% APR are wildly irresponsible or desperate.

insane_dreamer• 3 months ago

Credit cards are a death trap, unless you use them as a debit card - as a convenience (and to collect points) not as a source of credit.

I've had credit cards for 30 years. Use cards for all expenses when I can, have always paid the bill in full every month, have never spent a dollar of interest in my life, so I don't even look at the interest rate when getting a new card. I don't spend anything I know I won't be able to pay for at the end of the month (and yes, that does mean we've postponed purchases for months or even years).

But the allure of buy now pay later is pushed so heavily that it's hard for many people to resist.

eddyg• 3 months ago

For ref, fere’s the FRED chart on credit card debt:

https://fred.stlouisfed.org/graph/?g=1Vus3

emsign• 3 months ago

AI is sucking money out of other sectors. Unfortunately many of which a degrow means a decrease in living standards (unless you can afford the premium). I think they call it K shaped economy. It's bad right now.

Bankruptcies increase 11.9 percent

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