A recent report revealed a significant increase in the number of Americans considering declaring bankruptcy during the first half of 2025, reaching the highest level since 2020, the year the COVID-19 pandemic broke out, which left deep economic effects that are still resonating today.
The report issued by Legal Shield, a provider of legal assistance services, stated that this increase reflects a rising level of financial pressure on American households, in what the company described as the 'new normal' that the American citizen is experiencing amid ongoing economic challenges.
The report relies on the consumer legal pressure index, which tracks about 150,000 calls monthly from individuals seeking legal advice related to bankruptcy, mortgage foreclosure, and consumer financing.
According to the data, bankruptcy filings have risen by 14.2 percent by the end of 2024, and Legal Shield indicates that this increase is linked to several factors, most notably new tariffs, rising consumer debt, increasing interest rates, fluctuations in the real estate market, and concerns about mortgages.
At the same time, BankruptcyWatch.com, a website specializing in tracking bankruptcy data, reported that the number of bankruptcy cases filed in the United States since the beginning of 2025 reached 144,034 cases, with a weekly average of 10,288 cases, compared to an average of 9,687 cases weekly during 2024.
These figures raise widespread concern among economists and policymakers, especially since they reflect the fragility of the economic conditions for an increasing number of citizens, amid a lack of radical solutions to contain the crisis or mitigate its effects on the middle and lower classes in American society.
These developments highlight the need for adopting more inclusive and sustainable economic policies that enhance financial stability and protect consumers from falling into the cycle of bankruptcy.