Business bankruptcy filings were comprised primarily of Chapter 7 and 11 filings, with the two representing approximately 90% of all filings over the six-year span. Both Chapter 7 and 11 have wider applicability, while other chapters are tailored for specific circumstances.
Commercial bankruptcies in Q1 2026 totaled 8,436, surging 1,061 year-over-year. Chapter 11 filings rose to 2,422 in Q1 2026, from 1,764 in Q1 2025 — a 37% YoY increase. Subchapter V filings — a process specifically designed for small businesses — jumped 67% YoY to 833 in Q1 2026, suggesting mounting financial stress within the small business sector.
Narrowing in on Subchapter V, filing volumes in the first three months of 2026 significantly outpaced those recorded in 2025.
Tariffs, fuel prices, and overall economic uncertainty may be underlying factors to the current spike in filings.
Despite this, Bloomberg’s bankruptcy index hit a one-year low on 4/2/2026, at 113.71. The index only tracks bankruptcies with at least $50 million in reported liabilities, indicating large businesses are maintaining greater financial stability than their smaller counterparts.
Even in the business world, the K-shape economy persists.
