Why Bankruptcy Filings Are Surging: Understanding the New Wave of Filings

It is time to talk about what is happening in bankruptcy right now.

There is a trend that has not been seen in quite some time: bankruptcy filings are up, and they are up significantly. For the past decade, bankruptcy filings have steadily declined, reaching historic lows. From approximately 2015 through 2020, filings continued to drop as the economy remained strong. When the pandemic arrived in 2020, filings were already low, and then government programs and stimulus efforts helped keep people afloat. This kept bankruptcy filings at record lows throughout 2021 and 2022.

However, the landscape has changed dramatically in the last couple of years. Interest rates have increased, making credit card debt, car loans, and mortgages more expensive than ever. The level of every kind of debt—credit card, mortgage, student loan, auto loan—is now at a record high. As a result, delinquencies have been rising rapidly. When high debt levels are combined with high interest rates, debt management becomes a serious challenge for many people. As a result, bankruptcy filings are rising, and courts are taking notice.

Whenever filings increase, more lawyers begin advertising bankruptcy services. With over 35 years of practice in bankruptcy law, it is clear that true bankruptcy specialists remain a small group. The courts and trustees know who these practitioners are. During the Great Financial Crisis, many attorneys claimed to specialize in bankruptcy, but a closer look often revealed they handled only a handful of cases each year.

Bankruptcy law is not just a paperwork exercise. Approximately 20 years ago, Congress reformed the bankruptcy code, making it a highly specialized field with complex requirements and pitfalls for the unwary. For example, the full state homestead exemption cannot be used unless the homeowner has lived in the property for 40 months—a very specific and easy-to-miss detail. The code is full of technicalities like this, which is why experience matters.

A recent review of filings on PACER, compared to other practitioners in the area, shows that more bankruptcy cases have been handled here in Lowell than by anyone else, whether considering the last 35 years, the last decade, or just 2024. While overall volume is down from 15 or 20 years ago, that is true for everyone. Occasional “dabblers” in bankruptcy are hardly filing at all.

Those facing financial distress should know they are not alone and deserve experienced guidance. Thousands of people have been helped through bankruptcy, with homes and cars saved, garnishments stopped, and foreclosures halted. Whether an individual or a small business owner, help is available to navigate these challenging times.

If you are struggling with overwhelming debt or considering bankruptcy, experienced legal guidance can make all the difference. Contact the Law Office of Louis S. Haskell to schedule a confidential consultation and discuss your options. Take the first step toward financial relief—help is available.