608,511 Bankruptcies in a Year — and Whether You Get Chapter 7 Depends on Where You Live

The federal judiciary recorded 608,511 bankruptcy filings in the 12 months ending June 30, 2026, against 542,529 in the same period a year earlier — an increase of 12.2%. Almost all of it is households rather than companies: 581,570 cases were filed by people whose debts are predominantly non-business, and only 26,941 by businesses.

That much has been reported. The part that has not is what happens when you open the second table. Of those filings, 382,161 were Chapter 7 and 215,490 were Chapter 13 — and the split between the two is wildly different depending on which state you file in.

The two chapters are not variations on a theme. Chapter 7 discharges qualifying debt in a matter of months and ends. Chapter 13 is a repayment plan lasting three to five years, during which the filer lives on a court-supervised budget and the case can still fail — if the plan is not completed, the debts come back.

Nationally, 62.8% of filings are Chapter 7. Among states with at least 2,000 filings, the range is extraordinary:

• Louisiana: 25.2% Chapter 7 — three out of four filers enter a multi-year plan.
• Alabama: 30.0%. South Carolina 34.8%. North Carolina 36.2%.
• Idaho: 91.4% Chapter 7. Connecticut 83.9%, Oklahoma 82.9%, Nevada 82.8%, Arizona 82.5%.

A household in Baton Rouge and a household in Boise with the same income and the same debts do not get the same bankruptcy. The federal statute is identical in both places. What differs is local practice — the customs of the district, what the trustees expect, and what the local bar files by default.

The 12.2% national rise is an average of some very uneven states. The largest increases were in Alaska (+57.7%), the District of Columbia (+48.8%) and North Dakota (+46.9%) — all small in absolute terms, where a few hundred cases move the percentage a long way.

The increases that carry weight are the large states: Texas +23.7% (42,229 filings), Florida +21.3% (49,338), California +14.7% (58,111), Georgia +13.8% (33,570). Two states barely moved: Illinois +4.7% and Wisconsin, which was flat.

Delaware fell 20.9%, which sounds like good news and is mostly an artefact — Delaware is where large corporations file, so its numbers track the corporate calendar rather than household distress.

These are filings, not outcomes. The tables count cases commenced; they do not say how many Chapter 13 plans were completed, and the completion rate is the number that decides whether a filer actually got relief.

They also say nothing about why. A filing figure rises when distress rises — and also when access improves, when a court clears a backlog, or when a moratorium ends. We are reporting what the courts counted, not the cause.

One caution about comparing states in the table below: the figures are absolute, not per head of population. A large state will sit near the top on volume alone. The Chapter 7 share is the column that compares cleanly, because it is a ratio within each state.