Do Bankruptcy Stats Show We're Heading Into Recession?

President Donald Trump has been engaging in a trade war with just about every other country in the world besides Russia, which has sent the stock market into freefall. Thanks to his trusty billionaire companion Elon Musk, the DOGE, or Department of Government Efficiency, the federal government- the country’s largest employer- has laid off thousands of employees since the inauguration, with more to come. A volatile stock market and rising unemployment tend to signal that a country may be, or soon be, in a recession. But there are other recession indicators that can provide a reliable view of an economy in downturn. When an economy is doing poorly, there tend to be more business and personal bankruptcy filings. Read on to learn more about the latest bankruptcy trends in the United States and what they might tell us about the economy as a whole. For affordable and reliable bankruptcy representation in Henderson, Nevada, call 702-899-3328 for your free consultation.

Week 14 Statistics Review

One way to look at bankruptcy data is by comparing a week’s filings, discharges, and dismissals compared to that same week in previous years. For the 14th week of the year, there is data available for chapter 7, chapter 13, and chapter 11 bankruptcy cases. There is also data for chapter 12 bankruptcy, a special type of bankruptcy for farmers, but so few cases are filed per year it could skew the data.

There were 7,577 chapter 7 bankruptcy filings in the U.S. for the 14th week of 2025. This is an increase of approximately 47%, with 5,157 chapter 7 bankruptcy filings this time last year. Chapter 7 bankruptcy discharges, or cases completed successfully, rose by 12% to 4,745. Dismissals, or cases closed without discharging debts, rose from 161 to 219. Chapter 7 filings accounted for 63.1% of all bankruptcy cases in the U.S.

Before discussing chapter 13 bankruptcy, it’s worth noting that it takes 3 to 5 years to complete versus the approximate 3 to 6 months that chapter 7 bankruptcy takes. That means the cases that are just now finishing were filed years ago, and cases filed now won’t be complete for several years. There were 3,522 chapter 13 bankruptcy filings in week 14 of 2024, but 4,242 in 2025, which is an increase of 20%. Discharges actually went down from 1,955 to 1,625. There was only a slight increase in dismissals- 1,855 to 1,911.

Chapter 11 bankruptcy only accounts for 1.6% of filings, but can be a good indicator of the economy because it can be used to save major corporations that are struggling with debt. Red Lobster, Forever 21, and 23AndMe are just a few of the larger companies that have recently filed for chapter 11 bankruptcy to protect themselves from creditors. Chapter 11 filings decreased in week 14 from 196 in 2024 to 191 in 2025. Discharges increased from 6 to 10, but dismissals decreased from 60 to 52.

March Bankruptcy Filings Review

Bankruptcy filings for a month can’t be analyzed until that month is over, so the most recent month currently available is March 2025. Once data is available, that month’s filings can be compared to the same month from previous years. Comparing month-to-month isn’t the most accurate method because certain factors make certain months less popular to file- for example, April can be a slow month due to debtors being preoccupied by their tax filings. According to the American Bankruptcy Institute, bankruptcy filings across all chapters have increased 13% as compared to March 2024. Commercial filings are up, but small business filings are slightly down- only by 1%. Individual filings hold true to the 13% increase, and there were 47,462 personal bankruptcy filings in the United States for March 2025. If thousands of people across the country can benefit from bankruptcy, it might be able to help you with debt too. Schedule your free consultation with a Henderson bankruptcy lawyer today by calling 702-899-3328.

Other Recession Indicators

Recession indicators can stem from consumer activity, business activity, and other financial factors. Different experts have their own chosen recession indicators, but many of these experts share several of these in common. Financial experts have identified 10 major recession indicators based on the U.S. economy. Currently, most of these indicators are trending towards a recession. Some of the signs that a country could be in a recession include:

Housing permits: More housing permits mean people are building bigger and better homes, which slows down in times of economic downturn
Job sentiment: Workers who feel confident about their jobs are more likely to go out and spend money, knowing that they have another paycheck on the way
Unemployment claims: If someone loses their job, their income goes down and they have less money to go out and spend on other goods and services
Retail sales: Retail sales track consumer consumption, which is a major factor affecting the GDP
Salary growth: When wages are higher, consumers have more funds available to spend on discretionary purchases, which also allows goods and services providers to raise prices
Commodities: When demand for product is high, companies can pass commodity surcharges onto consumers (like high fuel or labor costs), while prices will fall when demand does
ISM New Orders: The Institute for Supply Management tracks business manufacturing to get a better idea about the economy as a whole
Profit Margins: Narrowing profit margins can signal a recession because they cause businesses to hold back on hiring and other investments
Truck shipments: The majority of freight shipments in the United States- 70%- are moved by trucks, so fewer truck shipments can signal a slowing economy
Credit spreads: The difference in yield between two bonds of similar maturity but different credit quality
Money supply: How many dollars are available in the economy based on Federal Reserve policy
Yield curve: The difference between yields for 10-year Treasury Bonds and 3-month Treasury Bills

Don’t Want To Enter A Recession Burdened With Debt? Consider Filing For Bankruptcy In Henderson, Nevada.

People who work in certain industries are particularly aware of how current changes could affect their financial situation going into a potential recession. Tourism, entertainment, restaurants, and other businesses and services that are considered luxury purchases will be the first expenses eliminated from many people’s budgets. Federal employees may already be notice that their jobs are at risk. If your job isn’t recession-proof, you should be preparing for the financial consequences of this now rather than later. This can help you get ahead of your creditors and protect assets from collection. But if you file under the wrong chapter, forget to list assets or debts in your petition, and make other mistakes along the way, your bankruptcy case could become a bankruptcy disaster. The dismissal rate for bankruptcy is already high, and even higher for Chapter 13—but it is even higher for debtors who represent themselves. You deserve to retain high-quality legal counsel for your bankruptcy, and with Henderson Bankruptcy Lawyers, you can ensure that your case is handled with expertise. This is already a stressful matter without factoring in completing the legal work on your own. Learn more about the benefits of filing for bankruptcy in Henderson and receive a competitive quote for our services. Schedule your free consultation today at 702-899-3328.