Family Credit

The number of personal and business bankruptcy filings increased 11% in 2025 compared to the year prior, and the trend is not slowing down. BadCredit.org examined the driving forces behind the surge in April 2026, speaking with financial and legal experts about what is pushing more Americans toward bankruptcy. Family Credit Management President Michael McAuliffe contributed both his expert perspective and FCM's own proprietary client data, which the article cited as a particularly striking indicator of how quickly household debt loads have grown.

According to Family Credit Management's data, Americans seeking debt help today are carrying roughly three times as much debt as they were just four years ago. The average balance among clients grew from $9,573 in 2021 to $26,119 in 2025. The numbers are similarly striking across generations. The average balance for millennials tripled over the same period, and Gen Z clients saw their average balances nearly triple as well, despite being earlier in their financial lives.

McAuliffe pointed to the combination of easy credit access and rising costs as the core of the problem, particularly for younger borrowers who have not yet built up savings cushions to absorb financial shocks. When an emergency hits with no savings to fall back on, credit cards fill the gap. But in a high-rate environment, balances that start as a short-term solution can quickly become a long-term burden.

The article also highlights the lingering financial damage from the COVID-19 pandemic, which pushed many borrowers into debt they have never fully recovered from, and the particular difficulty younger generations face in simultaneously managing debt, covering rising living costs, and trying to save for the future.

Read the full article at BadCredit.org.