For more than a decade, individuals and companies filing for bankruptcy fell steadily between 2010 -June of 2022. But since then, numbers have increased.
New Data from the Administrative Office of the U.S. Courts shows the number of bankruptcies is up by almost 12% higher this year than last year.
Business bankruptcies are up by 11.4% so far this year compared to last year at this time.
People with car loans are getting hit as well.
More Americans are now carrying a record $1.68 trillion in auto loan debt, with monthly payments soaring nearly 40% since 2018 and subprime delinquencies reaching their highest levels in more than 30 years.
CarEdge automotive retail analyst Zach Shefska says the delinquency rate is rapidly becoming one of the most urgent and underreported financial pressure points facing American households today.
“Consumers are struggling under rising vehicle prices, extended loan terms, elevated interest rates, and shrinking affordability,” said Shefska.
Currently, the average monthly car payments have climbed to roughly $680, with some estimates nearing $760 per month. Meanwhile, more borrowers are taking on seven-year loans or longer just to afford transportation.
Fitch ratings data showing subprime auto delinquencies are now more common than at any point in 32 years, with a record number of borrowers falling more than 60 days behind on payments.
Zach Shefska says several key factors need to be addressed so consumers are facing higher auto cost.
These include:
Auto debt is quietly becoming America’s next major household financial crisis
How pandemic-era vehicle inflation permanently reshaped car affordability.
Consumers need to avoid getting trapped in dangerous long-term loans.
The real monthly cost of vehicle ownership most buyers underestimate.
How dealerships and lenders normalize unaffordable payments.
Why used cars are no longer providing the affordability relief consumers expect and whether repossessions are likely to continue rising in 2026.
