US Bankruptcy Filings Up 11% in 2026 as Small-Business Cases Surge 46%
469,719 total US bankruptcy filings in the first nine months of 2026, up 11% year-over-year, with Subchapter V small-business elections surging 46%, per an Oct. 8 ABI and Epiq AACER release.
The debt-cycle arithmetic is coming due: 469,719 filings in nine months, a 46% spike in small-business reorganizations, and no reprieve in sight from a credit card rate that has been above 20% for more than three years.
Key takeaways
- 469,719 total US bankruptcy filings (individual and commercial) were recorded January through September 2026, an 11% year-over-year increase, per the American Bankruptcy Institute and Epiq AACER.
- Subchapter V small-business Chapter 11 elections surged 46% year-over-year to 2,442, the sharpest stress signal in the data, as rate-sensitive businesses exhaust their cash buffers.
- Individual Chapter 7 liquidations, the filing type associated with financial desperation rather than restructuring, rose 13% year-over-year to 282,413.
The American Bankruptcy Institute and bankruptcy data provider Epiq AACER reported on October 8 that 469,719 total bankruptcy filings were made in the United States between January and September 2026, up 11% from 423,168 in the same period of 2025. Of those, 444,252 were individual filings (up 7%) and 25,467 were commercial.
The Numbers Behind the Headline
Individual Chapter 7 filings, which represent outright liquidation, came in at 282,413, a 13% year-over-year increase. Individual Chapter 13 reorganizations reached 160,817, up 8%.
The sharpest number in the release is Subchapter V. The 2,442 small-business elections represent a 46% surge from 1,672 in the same nine-month window of 2025. Subchapter V is a streamlined small-business Chapter 11 designed for reorganization, not liquidation. A spike of this magnitude means the productive layer of the economy, the contractors, restaurateurs, manufacturers, and small operators, is hitting the wall before the corporate restructuring teams even get called.
"The increase in bankruptcy filings, especially among small businesses, highlights the challenges many debtors continue to face amid persistent inflationary pressures, elevated borrowing costs, and economic uncertainty," said Amy Quackenboss, ABI Executive Director, in the October 8 statement.
Epiq AACER VP Michael Hunter has been consistent on the trajectory. In an August 2026 monthly release, he stated plainly: "As financial pressures persist, bankruptcy filings are likely to continue rising through 2026 and into 2027."
The annualized pace from the nine-month data runs roughly 625,000 filings per year. For context, the post-financial-crisis peak in 2010 ran at approximately 1.6 million annualized. The current pace is about 39% of that crisis peak. The trajectory, though, is not decelerating.
What the Debt Stack Actually Looks Like
The proximate drivers are not complicated. Credit card interest rates have been above 20% for more than three years. Household debt sat near $18.8 trillion as of Q1 2026, per an earlier Epiq AACER release. Delinquency rates across outstanding balances reached 4.8% in late 2025. The September payrolls report from the Bureau of Labor Statistics confirmed the job market is softening, with the US adding 29,000 jobs against expectations of roughly 84,000.
These are not independent data points. They are the compounding consequences of a decade of artificially cheap credit followed by a rate shock the system was never built to absorb. The K-shaped economy that dollar debasement produced put the financial cushion in fewer and fewer hands, and the people and small businesses without that cushion are now filing in court.
Hunter's framing from the Q1 2026 release is precise: "This acceleration aligns with broader economic pressures, including household debt nearing $18.8 trillion and delinquency rates worsening to 4.8 percent across outstanding balances in late 2025."
The thesis here is falsifiable. If year-over-year filing growth decelerates meaningfully toward 3 to 4% over the next two quarters, concurrent with credit card APRs falling back below 18% and sustained real wage growth, this reads as normalization noise rather than systemic break. If Subchapter V filings reverse their trend after running 46% or higher depending on the measurement window, the small-business stress signal weakens. Neither condition is present in the current data.
Legislation and What to Watch
Congress passed the Bankruptcy Threshold Adjustment Act, which Quackenboss said would expand "access for struggling businesses and families seeking bankruptcy relief." The bill raises the Subchapter V debt threshold to $7.5 million from approximately $3.4 million and increases the Chapter 13 individual debt limit to $2.75 million, per the bill summary on Congress.gov. More businesses and households now qualify for the reorganization tracks, which will likely push headline filing numbers higher in coming quarters regardless of underlying conditions.
The next meaningful read comes with the full-year 2026 filing data. Watch whether Subchapter V acceleration holds above 40% year-over-year or begins to flatten. Watch whether Chapter 7 liquidations, already running at 13% growth, pull away from the reorganization tracks. That divergence would signal businesses and individuals are no longer able to restructure their way out.
Sources
Frequently Asked Questions
Is an 11% rise in bankruptcy filings close to the 2008-2010 crisis peak?
No. The 2010 annualized filing rate was approximately 1.6 million. The current nine-month pace annualizes to roughly 625,000, about 39% of that peak. The direction matters, though. The year-over-year acceleration has been persistent across consecutive periods, not a one-quarter anomaly.
What is a Subchapter V bankruptcy and why does a 46% surge matter?
Subchapter V is a streamlined small-business Chapter 11 reorganization for companies under a debt threshold (now raised to $7.5 million under the Bankruptcy Threshold Adjustment Act, per Congress.gov). Small businesses are more cash-flow-sensitive and less insulated than large corporations. A 46% spike means they are running out of runway faster than the headline individual-filing numbers suggest.
What would it take for bankruptcy filings to reverse?
A sustained drop in benchmark rates that feeds through to credit card and business loan pricing, combined with real (inflation-adjusted) wage growth that meaningfully outpaces current price levels. Neither condition is present in data through September 2026.
