Why are bankruptcy filings going up — and how you might know it’s time to act
The numbers don’t Lie 💸
If at any point your monthly income does not match your monthly expenses or if one amount is less than the other, you cannot change the fact that the numbers don’t lie.
📈 Introduction
In recent years, bankruptcy filings in the United States—which had been steadily declining—have begun trending upward again. For many individuals whose income is shrinking or bills are growing, the message is simple: you don’t have to wait until everything collapses. Understanding the forces at work, the numbers behind the trend, and when it may be time to consider bankruptcy can help you make proactive decisions.
📊 The Numbers Don’t Lie
According to the Administrative Office of the U.S. Courts, U.S. bankruptcy filings reached 542,529 in the 12-month period ending June 30 2025 — up 11.5 % over the prior year.
For the year ending December 31 2024, filings climbed 14.2 % from 2023.
A Congressional Research Service report notes that the number of non-business (individual) filings increased from approximately 434,000 to 494,000 during that time.
These figures signal a meaningful reversal of the previous downward trend.
💥 What’s Causing the Spike?
Here are some of the major contributing factors:
1️⃣ Under-employment, Wage Pressure & Income Loss
When wages stagnate or hours are cut, the margin many households rely on shrinks. Bills like rent, utilities, and insurance don’t drop just because income does.
2️⃣ Garnishment of Tax Refunds or Paychecks
When refunds are intercepted or wages garnished 💰 (for taxes, child support, or judgments), the financial cushion people expect disappears — and debt stress intensifies.
3️⃣ Job Loss, Unemployment, or Retirement Transitions
Sudden income loss from layoffs, retirement, or health issues can push someone from “making ends meet” to “can’t make ends meet.”
4️⃣ Rising Costs + Higher Debt Payments
Inflation, high interest rates, and mounting credit-card debt mean many are paying more while earning less 📉.
5️⃣ Delayed Relief & Accumulated Obligations
Temporary relief programs that helped during tough times have ended. Now, unpaid taxes, judgments, and debt have piled up.
⚖️ When Should You Consider Filing?
Bankruptcy is not for everyone, but waiting too long can reduce your options. Ask yourself:
💭 Are my monthly bills greater than my income after garnishments or deductions?
💭 Are my wages or refunds being garnished so that I see very little relief?
💭 Have I experienced job loss, reduced hours, or retirement but my bills remain the same?
💭 Are my debts growing instead of shrinking despite regular payments?
If you answered “yes” to one or more of these, it’s time to speak with a professional about whether bankruptcy could give you a fresh start.
🎤 Real-World Example: Damon Dash
In September 2025, Damon Dash — co-founder of Roc-A-Fella Records and former partner to Roc Nation — filed for Chapter 7 bankruptcy in Florida.
Liabilities: ~$25.3 million
Assets: ~$4,350
Reported: ~$19 million in tax debt and ~$647,000 in domestic-support obligations
Even high-profile entrepreneurs can face overwhelming financial pressure. Dash’s case reminds us that bankruptcy is a legal tool — not a moral failure. It’s a strategic reset when obligations outweigh income and assets.
🧭 What You Can Do Next
✅ Get a clear picture of your current income, debts, and any garnishments.
✅ Track your financial gap: How much of your income goes toward fixed bills vs. flexible spending?
✅ Seek advice early: Waiting too long can reduce your legal and financial options.
✅ Know your rights: A bankruptcy attorney can help determine if Chapter 7 or Chapter 13 fits your situation.
✅ Act strategically: Filing sooner may protect assets and reduce stress sooner than waiting.
💬 In Summary
The rise in bankruptcy filings reflects real financial stress affecting households across the country. If you’re under-paid, facing garnishments, unemployed, or overwhelmed by debt, don’t ignore the warning signs.
As Damon Dash’s case shows, anyone can face financial reset moments — what matters is how you respond. Bankruptcy isn’t about giving up; it’s about regaining control.
If you’d like help assessing your situation or understanding your options, reach out for a confidential consultation. Taking action today could be the first step toward your financial peace of mind. ✨
📞 Schedule your bankruptcy consultation today.
Meet the founderShakeena Melbourne
At the heart of Upton Law is Shakeena Melbourne, founder and Principal Attorney, a lawyer who is a fierce advocate for your peace of mind and happiness.
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