US bankruptcy filings surged by 18% in 2023, driven by higher interest rates, tougher lending standards, and the runoff of pandemic-era backstops. Commercial Chapter 11 business reorganization filings increased by 72%, while consumer filings rose by 18%. The rise in bankruptcy case counts is expected to continue in 2024, albeit still below the 2019 pre-pandemic level. Household debt at record high $17.3 trillion, delinquency rates edging higher, and financial conditions for businesses and households have tightened significantly due to aggressive interest rate hikes.

Rising US Bankruptcies in 2023