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Just the Facts: Consumer Bankruptcy Trends, 2005-2021


The bankruptcy process can provide a fresh financial start for consumers who cannot pay their debts, either because of insolvency or insufficient income to meet creditor demands. Personal bankruptcy generally works in one of two ways: liquidating assets to pay one’s debts under Chapter 7 of the U.S. Bankruptcy Code or establishing a repayment plan under Chapter 13 of the code.1 

Under a Chapter 7 liquidation, a debtor generally can achieve a fresh financial start more quickly than under a Chapter 13 repayment plan, which can last up to five years.2 However, under Chapter 13, a debtor may be able to save a home from foreclosure, reschedule secured debts and extend them over the life of a Chapter 13 plan (possibly lowering the payments or interest rates), and consolidate debt payments to a trustee who then handles distribution to creditors. 

Both nonbusiness and business bankruptcies are available. This article focuses solely on nonbusiness filings as nonbusiness bankruptcies accounted for 97 percent of bankruptcies during the 12-month reporting periods ending Sept. 30, 2006, through Sept. 30, 2021. 

Facts and Figures 

Figures and Maps

Note: Click on the tabs below to view the figures and maps.

1 Other types of bankruptcy include: Chapter 11 (Reorganization/Individual/Small Business), Chapter 12 (Family Farmers or Fishermen), Chapter 15 (Cross-Border Cases), Chapter 9 (Municipalities). Some individuals use Chapter 11 to obtain relief.

2 CARES Act (subsequently extended by the COVID-19 Bankruptcy Relief Extension Act) permitted debtors in plans confirmed prior to March 27, 2021, experiencing COVID-19-related hardship could move to extend their plans to up to 7 years. See Section 1113(b)(1)(C) of the CARES Act.

3 The remaining 1 percent of Nonbusiness filings were petitions under Chapter 11.

4 Source: Mortgage Bankers Association, National Delinquency Survey, Q3 2020.  

5 For more information on housing insecurity and the COVID-19 pandemic, please visit

6 For more information on debt service ratio trends, please visit

7 For more information on consumer spending trends, please visit

8 For more information on why debtors from the South choose Chapter 13 more often than those in other states, please see

9 Per capita count of Chapter 13 consumer bankruptcies were high in the Central District of California and Northern District of Illinois because of the large size of those courts. 

10 Source: Annual Estimates of the Resident Population for the United States (NST-EST2020). 

Related Topics: Statistics