In 2025, corporate financial stress in the United States reached a critical point, with 717 large companies filing for bankruptcy through November, marking a 15-year high not seen since the aftermath of the 2010 Great Recession. According to data from S&P Global Market Intelligence, filings rose 14% year-on-year, underscoring the depth of pressure facing American businesses.
Economists attribute the surge to a convergence of destabilizing forces. Aggressive trade policies and tariffs sharply increased input costs for import-dependent sectors such as manufacturing and construction. At the same time, persistently high interest rates made refinancing prohibitively expensive, pushing highly leveraged “zombie companies” into insolvency.
Consumer behavior also shifted. Inflation-weary households prioritized essentials like food and housing, cutting discretionary spending and hitting retailers, fashion brands, and home-furnishing companies hardest. Meanwhile, ongoing supply-chain disruptions, driven by geopolitical tensions and rerouted trade flows, continued to elevate logistics and operating costs.
The crisis has not been limited to small businesses. The first half of 2025 saw 17 or more “mega-bankruptcies”involving companies with over $1 billion in assets or liabilities, the highest level since 2020. S&P data shows that mid-sized private firms—carrying $10 million to $100 million in debt—accounted for the largest share of filings, caught between limited cash buffers and reduced flexibility.
Bankruptcies were concentrated in major economic hubs. California’s Central District led filings due to its dense concentration of retail and consumer-tech firms. Delaware and Texas remained preferred venues for Chapter 11 cases because of business-friendly legal frameworks. Industrial states such as Pennsylvania and Ohio saw a notable rise in filings, reflecting manufacturing-sector job losses exceeding 70,000 nationwide by November.
Roughly 60–65% of companies filed for Chapter 11, seeking restructuring rather than closure, while 35–40% entered Chapter 7 liquidation, resulting in complete shutdowns.
While the headline number is alarming, the fact that a majority of firms are pursuing restructuring suggests that many companies are fighting to survive. The coming year will test whether these reorganizations can succeed in a higher-cost, slower-growth economic environment.
