Business Bankruptcy Filings on the Rise

Last year, I filed one bankruptcy case. This year, it’s the first week of February and I’m already working on five cases. This sudden increase makes me wonder: Is it just me, or are bankruptcy cases on the rise?

According to the US Courts website, bankruptcy filings rose 14.2 percent in the twelve-month period ending December 31, 2024, compared with the previous year, with business filings rising 22.1 percent.[1] 

They further report that, over the last decade, total filings fell steadily from a high of nearly 1.6 million in September 2010 to a low of 380,634 in June 2022. But since then, filings have increased each quarter. They’re still lower than historical highs, but they’re increasing steadily. Especially business filings.

That trend holds true in Washington, where 267 business bankruptcies were filed in 2024, a 52 percent increase from 2022. So, yes, bankruptcies are definitely on the rise, especially business bankruptcies.

What’s fueling this? Covid-relief loans, for one thing. I’ve been hearing from a lot of small business owners who took out or personally guaranteed SBA loans to help them through the pandemic, and aren’t able to pay because of a combination of increasing rent, reduced revenue, and exhaustion of financial reserves.

Do they need to file bankruptcy? Not always. Sometimes they can negotiate with the landlord, make an offer-in-compromise to the SBA, wind up the business, or restructure. But if the SBA is demanding payment and you can’t pay, you need to act fast before penalties are added that will make the situation worse.

If you or your business are experiencing financial difficulty, it’s a good idea to contact a bankruptcy lawyer to explore your options and develop a plan. Please call us at (206) 420-2466 or email westwoodlawoffice@gmail.com to schedule a consultation. We’d be happy to discuss your situation and see how we can help you.

This blog is intended for informational purposes only and does not constitute legal advice or an offer of representation. No attorney-client relationship is intended or created by this article. If you wish to obtain legal representation, please contact Westwood Pacific Law PLLC at (206) 420-2466 or westwoodlawoffice@gmail.com. 

[1] https://www.uscourts.gov/data-news/judiciary-news/2025/02/04/bankruptcy-filings-rise-14-2-percent