America’s Breaking Point: The Bankruptcy Wave That Washington Pretends Not To See

By Brian Allen

The numbers are no longer blinking warning lights. They are sirens. And if you listen closely, you can hear them over everything else happening in Washington. While political elites fight each other on television, regular Americans are quietly drowning.

New federal court data reveals that U.S. bankruptcy filings have surged again in 2025. This is not a minor bump. This is a structural stress fracture in the economy and a sign that millions are running out of road.

According to the Administrative Office of the U.S. Courts, bankruptcy filings rose 10.6 percent in the twelve months ending September 30. Nonbusiness filings jumped 10.8 percent, and total filings climbed to 557,376, the highest level since the pandemic-era spike in 2020.

One line from the report captures the quiet crisis taking shape: these filings represent “mounting financial pressures on both households and businesses.” That is the soft bureaucratic way of saying the American middle class is suffocating.

And this was supposed to be the year everything “normalized.”

But the trend is not normal. It is accelerating.

The Collapse Is Not Theoretical. It Has Names.

Several major companies have already buckled under the same pressures crushing American families. The list includes Spirit Airlines, Claire’s jewelry, and First Brands, the auto-parts company whose sudden implosion sparked concerns about wider instability in U.S. lending.

When recognizable brands begin falling like over-leveraged dominoes, it is not an accounting story. It is a national barometer.

The American Bankruptcy Institute confirmed the same pattern. Their October analysis showed a 12 percent year-over-year increase in U.S. bankruptcy filings, with small businesses hit even harder. ABI noted that individual bankruptcies rose 13 percent, while commercial bankruptcies increased 7 percent.

Then came the real warning:

Large corporate bankruptcies are approaching a fifteen-year high, according to S&P data cited in the article. With 655 major filings so far in 2025, the country is nearing 2010 levels, the aftermath of the Great Recession.

That is not a normal business cycle. That is an economy cracking under the weight of inflation, interest rates, unstable credit markets, and stagnant wages.

The Experts Are Saying the Quiet Part Out Loud.

Amy Quackenboss of the American Bankruptcy Institute issued a blunt assessment: “Persistent economic headwinds, including higher prices, tighter lending conditions, and ongoing geopolitical uncertainty, continue to weigh on financially distressed consumers and businesses.”

Pamela Foohey of the University of Georgia School of Law went even further. She warned that the spike in both family and small-business bankruptcies shows that “budgets are tightening,” driven by inflation, rising costs of housing, food, and gas, and the widening gap between wages and the cost of survival. She added that families are turning to credit cards to stay afloat until they “cannot pay even the minimum amounts,” triggering debt collection and then bankruptcy.

That is not a blip. That is the anatomy of a collapse.

Michael Hunter, vice president at Epiq AACER, cautioned that the same pressures will continue into next year, saying the factors driving bankruptcies “indicate a continued demand for both consumers and businesses to seek bankruptcy protection.”

In other words, 2025 may be remembered not as the moment America recovered, but the moment America broke.

The Political Class Will Pretend They Didn’t See This Coming.

The people writing the laws, hosting the fundraisers, and selling fantasies about a “roaring comeback” will act surprised. They will blame consumer choices. They will blame global events. They will blame everything except the financial system and policy choices that created this pressure cooker.

But the truth is simple.

Household debt is at a historic high.

Inflation has eaten wage gains alive.

Housing is unaffordable for an entire generation.

Small businesses, the backbone of the economy, are being crushed by tariffs, credit tightening, and cost spikes they cannot offset.

This is not personal failure. It is systemic failure.

And it is about to get worse before it gets better.

Bankruptcy Is Not the Story. Bankruptcy Is the Symptom.

A surge in bankruptcies is not the crisis itself. It is the final stage of a crisis that began years earlier, when wages stopped keeping pace with the cost of living, when medical debt became a normal feature of American adulthood, when rent and mortgages shot past what a reasonable person could earn.

Bankruptcy is the red flare in the night sky.

It tells you a ship is sinking long after the water has already flooded in.

This is America’s flair.

Final Word

This is the truth Washington is allergic to.

An economy that forces half a million people into bankruptcy in a single year is not healthy. It is an empire held together with tape.

Families are sliding into insolvency.

Small businesses are collapsing under impossible costs.

Major corporations are falling faster than they did after the 2008 crash.

The danger is not that Americans are filing for bankruptcies.

The danger is that Americans are running out of options.

If you want journalism that refuses to look away, that explains the real stakes behind the headlines, and that puts truth over political convenience, support this work.

Become a paid subscriber to AllenAnalysis so we can keep doing independent reporting that cuts through the noise.

References

Newsweek. (2025, December 2). US bankruptcy filings surge. Newsweek Digital LLC. Retrieved from

American Bankruptcy Institute. (2025). ABI statement and October bankruptcy data as cited in Newsweek.

S&P Global Market Intelligence. (2025). Corporate bankruptcy trend data as cited in Newsweek.

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