U.S. bankruptcy filings rise as more younger adults seek debt relief

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US bankruptcy rise among young adults

Highlights

Over 533,000 individual bankruptcy cases were filed in 2025, with nearly 333,000 Chapter 7 and just over 200,000 Chapter 13 cases, according to Epiq Bankruptcy Analytics.
Young adults aged 25–35 now account for 30%–35% of some firms' bankruptcy caseloads, a sharp rise from the previous 5%–10% historical range.
Rising housing costs, stagnant wages, easy credit access, and online gambling—sometimes creating $20,000 to $40,000 in credit card debts—are intensifying financial risk among younger consumers.

Filing growth reflects consumer debt strain

More than 533,000 individual bankruptcy cases were filed in 2025, according to the American Bankruptcy Institute, citing data from Epiq Bankruptcy Analytics. That total remains well below the post-Great Recession peak in 2010, when cases exceeded about 1.5 million, but it continues the rebound from the low reached during the COVID period in 2022. Nearly 333,000 of the 2025 filings are Chapter 7 cases, which typically erase most unsecured debt such as credit card balances and medical bills. Just over 200,000 are Chapter 13 cases, which require a repayment plan.Florida bankruptcy attorney Chad Van Horn says younger adults now make up a much larger share of his firm's caseload than in the past. He says clients aged 25 to 35 accounted for about 30% to 35% of roughly 4,000 clients last year, compared with a historical range of 5% to 10%. North Carolina attorney Ed Boltz says his firm handled about 2,000 bankruptcy cases in 2025, with around 20% of clients falling into that same age range. Both lawyers say the increase is notable even though there is no comprehensive official dataset tracking filer age nationwide.

Costs, credit access and gambling add pressure

The attorneys say younger filers often face a combination of rising housing costs, broader living expenses and wages that have not kept pace. They add that many also carry student loan balances, which generally cannot be discharged in bankruptcy, leaving less room in household budgets. Easy access to credit cards, personal loans and buy now, pay later products has, in their view, made it easier for some borrowers to accumulate debt rapidly. Van Horn also says gig work, once used to bridge budget shortfalls, is not providing the same financial support it once did.Both lawyers say online gambling is becoming a more visible source of debt, particularly among younger male clients. Boltz says his firm is seeing more cases involving $20,000 to $40,000 in credit card debt built up quickly through sports betting and similar activity. The article notes that DraftKings stopped accepting credit card deposits in August, while FanDuel ended the practice earlier this month. It also says crypto-based prediction platform Polymarket has allowed users to fund accounts with credit cards since 2024.

Law firms and finance trends show changing behavior

Van Horn says the younger client mix is changing how his firm approaches marketing, because people in their mid-20s to mid-30s do not seek information in the same places as older consumers. The article also points to social media, including TikTok videos in which some young users describe bankruptcy as a useful way to reset overwhelming debt. That suggests bankruptcy is becoming more openly discussed among younger consumers than in earlier years. Even so, Boltz says it remains unclear whether this age group now represents a larger share of all filers nationally or whether firms are simply seeing the effects of a broader increase in cases.For the consumer finance sector, the trend highlights growing stress in a demographic that typically sits earlier in the wealth-building cycle. Rising unsecured borrowing, persistent cost inflation and digital betting tools are combining to increase financial risk for some younger households. If those pressures persist, bankruptcy attorneys and lenders may continue to see changing patterns in who seeks debt relief. The data and lawyer interviews in the article indicate that younger consumers are becoming a more important segment in the personal insolvency landscape.

We previously reported on Affirm’s outlook amid a weaker consumer environment after the Federal Reserve held rates steady. That update focused on the company’s ongoing demand and Affirm Card growth, alongside its plan to buy back convertible bonds—while technical indicators still pointed to persistent selling pressure in the stock.

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