August 25, 2026
CNN recently featured Jay Zagorsky, Clinical Associate Professor of Markets, Public Policy, and Law, on “This Morning”, where he discussed his research on the recent spike in personal bankruptcies and what the trend could mean for the U.S. economy.
The segment examined how personal bankruptcy filings have increased for three consecutive years, with more than half a million Americans filing in 2025. Filings have also seen a modest increase in the post-pandemic period, as Americans continue to face rising costs and higher levels of consumer debt. Credit card interest rates have climbed from 14% to 21% over the past four years, adding to the financial strain on households.
The highest rates of personal bankruptcy appear to be concentrated in the South. Rising gas, food and oil prices are contributing to a growing sense among some Americans that they are struggling to keep up financially.
“This is the problem. Bankruptcies over the last two years have risen by 25%. We have 25% more bankruptcies than we did two years. And I think this is suggesting at least for people who are financially fragile that the economy is just not working for them anymore. For people who are not financially fragile, I think the economy is doing quite well,” Zagorsky adds.
Bankruptcy rates also vary across geographic and demographic groups, with higher rates among people with lower levels of financial literacy and those who are divorced.
