If you’ve been feeling the financial squeeze lately, you’re not alone and the numbers are starting to reflect it.
According to new data from Epiq AACER, a leading U.S. bankruptcy filing tracker, total consumer bankruptcy filings jumped 12% from 2024 to 2025, rising from approximately 478,000 to nearly 534,000 cases nationwide. That’s a significant shift, and one that’s being felt in communities like ours here in central Iowa.
At Nancy L. Thompson Law Office, P.C., we believe that understanding what’s driving this trend and what your options are can make all the difference when you’re facing financial hardship.
Experts point to a combination of persistent inflation, elevated borrowing costs, and the resumption of student loan repayments as major catalysts. Rising medical insurance costs and mounting credit card balances are also pushing more households toward the breaking point.
There’s also an important timing element worth understanding. Financial experts note that people typically hold off on filing for bankruptcy as long as they possibly can, which means the economic pressures driving today’s filings may have been building for months or even years. There comes a point where mounting bills and growing credit card balances simply become too much to carry. Sound familiar? If so, keep reading.
Is This a Crisis or a Return to Normal?
It’s worth putting this data in context. Bankruptcy filings dropped sharply during the COVID-19 pandemic, when government relief programs and loan forbearance plans gave many households temporary breathing room. As those measures faded, filings have steadily climbed back upward.
According to Epiq AACER’s vice president, the current trend largely reflects a return to pre-pandemic levels rather than an unprecedented surge. That said, experts have cautioned that filings could continue to climb through this year and beyond.
In other words, now is a good time to be informed before a financial situation becomes a financial crisis.
What Does Bankruptcy Actually Do?
There’s a lot of stigma around bankruptcy, and a lot of misinformation. Here’s the plain truth, a bankruptcy filing can provide a genuine financial reset by stopping debt collection and eliminating some or all of your debt.
For many Iowa families, that reset is exactly what’s needed to get back on solid ground.
The two most common forms of consumer bankruptcy are:
Chapter 7: Chapter 7 can discharge unsecured debt like credit cards and medical bills relatively quickly, typically within a few months. It’s best suited for individuals with limited income.
Chapter 13: A reorganization plan that allows you to repay some or all of your debt over three to five years. This is often the right path for homeowners who want to protect their home from foreclosure or catch up on missed mortgage payments.
If you’re an Iowa resident struggling with credit card debt, medical bills, a potential foreclosure, or the weight of student loans you simply can’t manage, bankruptcy may be one option worth exploring. The key is having a conversation with an attorney who can look at your specific situation and help you understand your choices clearly.
We have helped Iowa families find their way through financial hardship for decades. We know how hard it is to make that first call. We also know how much lighter things can feel once you do.
