While the rest of the world isn’t immune to post-pandemic market pressures, it seems that the United States economy has been especially turbulent for the past several months. President Trump has issued tariffs, paused tariffs, and issued retaliatory tariffs, leaving Americans wondering how much their groceries and other necessities will cost tomorrow. In the larger scheme, more Americans than ever are concerned about how they will ever own their own home, afford medical care, or retire. 

Lawyer reviewing legal documents at a desk with scales of justice, symbolizing financial decisions during a recession

Year-Over-Year Data From March

A month must be complete before bankruptcy filings and other statistics can be accurately calculated, meaning March is currently the most recent month available. Comparing one month’s filings to the previous month’s isn’t always accurate- there are other factors like tax season or the start of a new year that can impact the filing rate without accurately showing how much has changed. Experts can glean more information from comparing one month’s data to that month from the previous year. So what have they learned from analyzing March 2025’s bankruptcy data as compared to bankruptcy data from March 2024? 

According to the American Bankruptcy Institute, there were 50,189 bankruptcy filings across all chapters in the United States in March 2025. Compared to 44,471 filings in March 2024, this is an increase of 13%. Commercial filings in general increased by 10%, with commercial chapter 11 filings increasing by 20% but chapter 11 filings using subchapters for small businesses decreased by 1%, showing that larger corporations are struggling. Personal bankruptcy filings- mostly chapter 7 and chapter 13- increased by 13% to 47,462. 

The data clearly shows that bankruptcy filings are up in 2025. But does an elevated bankruptcy rate mean that a recession is happening, or about to occur? During the 2008 Recession, more than 60,000 businesses filed for bankruptcy. During the prior recession from 1981-1982, there were 82,446 business bankruptcy filings. Business bankruptcy filings don’t trigger a recession, but they can be a sign that one is happening or imminent. Experts have witnessed a trend that personal bankruptcy filings will increase after business filings, and will begin to decrease later into the economy’s recovery- so the notable increase in individual bankruptcy filings may be a sign that the latest recession is already underway. 

Week 14 Bankruptcy Statistics

Bankruptcy data can also be analyzed week-over-week, with data through the 14th week of 2025 currently available. The data for week 14 shows:

Chapter 7

  • 7,577 chapter 7 bankruptcy filings in 2025 compared to 5,157 chapter 7 bankruptcy filings in 2024
  • 4,745 chapter 7 bankruptcy discharges in 2025 compared to 4,230 chapter 7 bankruptcy discharges in 2024
  • 219 chapter 7 bankruptcy dismissals in 2025 compared to 161 chapter 7 bankruptcy dismissals in 2024
  • Chapter 7 filings made up 63.1% of the filings for week 14

Chapter 13

  • 4,242 chapter 13 bankruptcy filings in 2025 compared to 3,522 chapter 13 bankruptcy filings in 2024
  • 1,625 chapter 13 bankruptcy discharges in 2025 compared to 1,955 chapter 13 bankruptcy discharges in 2024 
    • This anomaly may be explained by chapter 13 bankruptcy taking 3 to 5 years to complete, and there may have been pandemic filings just finishing up last year. 
  • 1,911 chapter 13 bankruptcy dismissals in 2025 compared to 1,855 chapter 13 bankruptcy dismissals in 2024
    • You may notice that the dismissal rate for chapter 13 bankruptcy is much higher than for chapter 7 bankruptcy. 
  • Chapter 13 filings made up 35.3% of the filings for week 14

Chapter 11 

  • 191 chapter 11 bankruptcy filings in 2025 compared to 196 chapter 11 bankruptcy filings in 2024
  • 10 chapter 11 bankruptcy discharges in 2025 compared to 6 chapter 11 bankruptcy discharges in 2025
  • 52 chapter 11 bankruptcy dismissals in 2025 compared to 60 chapter 11 bankruptcy dismissals in 2024
  • Chapter 11 filings made up 1.6% of the filings for week 14

Recession Indicators

Recession indicators aren’t just a meme on the internet making light of our country’s dire economic situation. They are historical signs that a country is in economic downturn. One highly trusted recession indicator is the Real-time Sahm Rule. This rule theorizes that the three-month moving average of the national unemployment rate rising by 0.50 percentage points or more signals the start of a recession. For March 2025, this figure is at 0.27 percentage points- nowhere near the 0.50 mark but still indicating that unemployment is on the rise. The highest the Sahm Indicator has ever reached is 9.50 in June 2020, undoubtedly due to the COVID-19 pandemic. For those who trust the Sahm Rule as the most reliable recession indicator, the percentage points could increase next month as mass federal layoffs continue. 

The Sahm Rule isn’t the only recession indicator that can frame observations of economic downturn. Some other trusted recession indicators include:

  • Inflation projections: The Fed has set a target for inflation at 2%, but there is little confidence that this goal will be met. Inflation expectations rose from 4.3% in February to 4.9% in March, which was the highest increase since November 2022. 
  • Credit card defaults and late payments: When Americans struggle to pay off their credit cards, it can signal trouble for the rest of the economy as well. American credit card debt rose to $1.2 trillion for the fourth quarter of 2024, which accounts for approximately 6% of the United States’ total $18 trillion in debt. Credit card defaults rose from 5.0% in January to 5.7% in February. There is also concern over increased availability for “buy now, pay later” programs like Klarna partnering with DoorDash resulting in even more credit card debt. 
  • Consumer confidence: Consumer confidence is a quantifiable figure that can show how consumers plan to spend and invest. Consumer confidence in the United States dropped 7.2 points from February to March. The Expectations Index is currently at a 12-year low and has fallen below a threshold which typically indicates a recession. The Consumer Sentiment Index also fell 15% from February to March. 
  • Business uncertainty: Business uncertainty is measured by the National Federation Of Independent Business’ Uncertainty Index. It reached 104 by February, which is the highest it has been since 1973. Only 37% of business owners expect economic improvement, and labor costs have been pinpointed as the most pressing issue for our country’s business owners. 
  • Trade policy uncertainty: With Trump’s tariffs, it seems like all one can do is expect the unexpected. The tariffs have resulted in stock market volatility and the Trace Policy Uncertainty Index has reached levels not seen since 2019. 

Seeking Debt Relief To Ease Recession Woes? Contact Our Arizona Bankruptcy Firm. 

Both personal and business bankruptcy filings are up, and recession indicators demonstrate that this is unlikely to change soon. While bankruptcy can be viewed as a negative and a sign that an economy is dwindling, it provides powerful protection from creditors and the debtor with a chance at a fresh start. There are different types of bankruptcy available for different income levels and what needs to be done with the debt. Choosing the right one is only the first step of filing an accurate bankruptcy petition so all debts can be discharged. You can even find the dismissal rates for chapter 7 and chapter 13 bankruptcy above. If you’re seeking an experienced Arizona Bankruptcy attorney with reputable staff to handle your Arizona bankruptcy case, look no further than Atlas Bankruptcy Lawyers. Get started today with your free consultation at 602-649-4949.