Business Bankruptcy Statistics 2026: Chapter 11, Subchapter V and Chapter 7 Filings

Business filings rose every year in this window, from 12,748 to 26,941. The jump between 2023 and 2024 was the steepest. Growth slowed in 2025, then picked up again in 2026.

Chapter 11 dipped slightly in 2025, to 8,408, then reached 10,320, the highest point in this series. Most of those cases are businesses: 9,766 of the 10,320.

Liquidation still dominates. Chapter 7 accounts for 15,298 business cases, which means a company that files is more likely to close than to reorganize.

Texas, Southern leads with 1,569 business Chapter 11 cases. These are case counts, so one large company with dozens of affiliates can push a district up the list.

Subchapter V elections rose from 2,202 in 2024 to 2,446 in 2025, and 2026 is already close to that full-year mark after nine months.

Commercial Chapter 11 counts were nearly flat between 2024 and 2025 at 7,893 and 7,940. The 2026 year-to-date figure of 6,560, up 11%, suggests that pause is over.

U.S. business bankruptcy filings by chapter, 12 months ending June 30, 2025 vs. 2026

Source: Administrative Office of the U.S. Courts, Table F-2. U.S. Bankruptcy Courts, Business and Nonbusiness Cases Commenced, by Chapter, 12-Month Period Ending June 30, 2025; Administrative Office of the U.S. Courts, Table F-2. U.S. Bankruptcy Courts, Business and Nonbusiness Cases Commenced, by Chapter, 12-Month Period Ending June 30, 2026. Download as image

All U.S. bankruptcy filings, business and non-business, 12 months ending June 30

Source: Administrative Office of the U.S. Courts, Bankruptcies Rise 12.2 Percent. Download as image

Bankruptcy filings, January 1 to September 30, 2026 vs. same period 2025 (Epiq AACER / ABI)

Source: Epiq AACER and American Bankruptcy Institute (ABI), Small Business Subchapter V Elections Increase 46% Compared to Last Year. Download as image

Are business bankruptcies going up in 2026?

Yes, and on two separate measures. The U.S. Courts count, which runs on a year ending June 30, shows 26,941 business filings, up 16.9% from 23,043. The Epiq AACER and ABI count, which runs on the calendar year, shows 25,467 commercial filings from January to September 2026, up 7% on the same months of 2025.

The two sources count differently, so do not add them together or compare one directly against the other. What matters is that both point the same way.

The mix is shifting too. Business Chapter 11 cases went from 7,900 to 9,766 in a year, and Subchapter V elections are up 46% so far in 2026. More small companies are choosing to restructure rather than close. For their creditors that is usually better news for their creditors than a liquidation, but it still means slower, smaller payments for anyone they owe.

What is the difference between Chapter 7, Chapter 11 and Subchapter V?

Chapter 7 is liquidation. A trustee sells what the business owns and splits the money among creditors in a set order. Unsecured creditors, such as a freelancer with an unpaid invoice, usually come near the back of that line and often get little or nothing.

Chapter 11 is reorganization. The business keeps running, proposes a plan to pay creditors over time, and asks the court to approve it. Contracts can be kept, renegotiated or rejected.

Subchapter V is a faster, cheaper version of Chapter 11 for smaller debtors. As of October 2026 a business qualifies if its combined debt is no more than $3,424,000 and at least half comes from business activity. Congress has passed a bill to raise that limit, but it was not signed as of mid-October 2026, so check the current figure before relying on it. Subchapter V cases are counted inside Chapter 11 in the court tables.

Why are so many Chapter 11 cases filed in Texas?

Large companies can often choose where to file, based on where they are incorporated, have their main office, or have an affiliate. Many pick districts with experienced bankruptcy judges and predictable procedures. That is why Texas, Southern recorded 1,569 business Chapter 11 cases and Texas, Northern 971, far ahead of any district in California, a state with a larger economy than Texas.

Delaware shows how quickly the map can move. It had 1,093 business Chapter 11 cases in the year ending June 30, 2025, and 331 a year later.

For you, the practical point is simple. If a large customer files, the case may be heard in a court hundreds or thousands of miles away. You will usually file your claim and watch the docket remotely, so read the notices you get in the mail and act on deadlines.

What happens when a client or vendor files for bankruptcy?

The moment a case is filed, an automatic stay kicks in. You must stop collection calls, demand letters and lawsuits against the debtor for money owed before the filing. Breaking the stay can expose you to penalties, even if the debt is real.

Say a marketing agency owes you for three months of design work and files Chapter 7. You become an unsecured creditor. You file a proof of claim and wait. Whatever you get comes after secured lenders, administrative costs and priority claims such as certain taxes and wages.

If the company files Chapter 11 instead, it may keep using your services while the case runs. Work you do after the filing is generally treated better than old invoices, but only if you get paid as you go. Do not let a new balance build up.

The same applies in reverse. If your SaaS vendor or equipment lessor files, it may reject your contract, cut support, or sell the business to a buyer with different terms. Your data, deposits and prepaid fees can get stuck in the process. A restaurant that prepaid a year of point-of-sale software, for example, may find itself filing a claim for the unused months while it pays a new vendor to replace the old one.

How to protect your business before a customer goes under

• Take a deposit or retainer before you start, and bill by milestone so no single unpaid invoice can hurt you badly.
• Keep payment windows short and charge a late fee in writing. A client that starts paying later and later is often giving you an early warning.
• Stop work when an invoice goes past due. Your contract should say you may pause without being in breach.
• Hold back ownership of your work until you are paid in full, so a buyer of the debtor's assets does not get your IP for free.
• Avoid prepaying a vendor for a full year unless the contract gives you a refund or data export if the vendor stops operating.
• When a customer files, stop collecting, read the court notice, and file your proof of claim before the deadline it names.

What if your own business is the one under pressure?

The rise in Subchapter V elections, 2,442 in the first nine months of 2026, shows how many small owners are using the courts to buy time. Bankruptcy can be a reasonable tool, but your loan documents decide a lot of what happens before you ever get there.

Many small business loans and merchant cash advances include a personal guarantee, so the debt follows you even if the company files. Some include a confession of judgment, cross-default terms or a blanket lien over everything the business owns. Read those clauses now, while you can still negotiate or refinance, and talk to a bankruptcy attorney before you miss a payment rather than after.

Sources and method

Every number on this page comes from the sources below, each opened and read on or before October 18, 2026. A second, independent review checked every figure against its source and corrected anything that did not match. Figures that could not be confirmed were left out.

1. Administrative Office of the U.S. Courts, Bankruptcies Rise 12.2 Percent (July 28, 2026 (12 months ending June 30, 2026))
2. Administrative Office of the U.S. Courts, Table F-2. U.S. Bankruptcy Courts, Business and Nonbusiness Cases Commenced, by Chapter, 12-Month Period Ending June 30, 2026 (12-month period ending June 30, 2026 (released July 2026))
3. Administrative Office of the U.S. Courts, Table F-2. U.S. Bankruptcy Courts, Business and Nonbusiness Cases Commenced, by Chapter, 12-Month Period Ending June 30, 2025 (12-month period ending June 30, 2025 (file created July 21, 2025))
4. Epiq AACER and American Bankruptcy Institute (ABI), Small Business Subchapter V Elections Increase 46% Compared to Last Year (October 8, 2026 (data through September 30, 2026))
5. Epiq AACER and American Bankruptcy Institute (ABI), Total Bankruptcy Filings Increase 11% in Calendar Year 2025 (January 12, 2026)
6. Epiq AACER and American Bankruptcy Institute (ABI), Commercial Chapter 11 Filings Increase 20 Percent in Calendar Year 2024 (January 3, 2025)
7. Administrative Office of the U.S. Courts, Chapter 11 - Bankruptcy Basics (Undated web page, read October 18, 2026)