Delaware, Texas have highest business bankruptcy filings in U.S.

Business bankruptcy filings have increased nationwide by nearly 12% in one year. That’s after they increased by nearly 15% the previous year.Business bankruptcy filings increased from 23,154 in the 12 months that ended March 31, 2025, to 25,796 in the 12 months ended March 31, 2026 — an increase of 2,642 filings, or 11.4%, according to a new LendingTree analysis.
Data tracked by LendingTree shows there were 20,185 bankruptcies filed from March 2023 to March 2024 and 23,134 from March 2024 to March 2025, representing a nearly 15% increase over the year.
Even though the percentage increase over the last year analyzed of 11.4% was lower than the previous year, the total number was higher of 25,796. In the last three years analyzed, nationwide bankruptcies per year increased by nearly 6,000, according to the data.
The growing increase in business bankruptcy filings “is absolutely worth paying attention to,” LendingTree’s chief consumer finance analyst Matt Schulz told The Center Square. “It doesn’t mean the sky is falling, but it does show that higher borrowing costs, lingering inflation and softer demand are still putting real pressure on businesses, especially those with thin margins or heavy debt loads. When filings rise by more than 2,500 in just a year, that’s a sign that more businesses are running out of options.”
Delaware has the highest business bankruptcy filing rate in the U.S. Texas has the greatest number of businesses that filed for bankruptcy, according to the analysis. Louisiana and New Jersey have the largest year-over-year increases in business bankruptcy filings.
Delaware has the highest rate of bankruptcy filings as more businesses leave the state and its legislature is scrambling to reverse a phenomenon known as DEXIT, The Center Square reported.
There were 538.9 bankruptcy filings per 100,000 small businesses in Delaware over the time-period analyzed – seven times greater than the national average, according to the LendingTree analysis.
“Delaware’s ranking reflects incorporation patterns as much as business activity within the state. Because so many businesses are legally based in Delaware, bankruptcy filings there often reflect a national corporate footprint rather than economic conditions within Delaware itself,” Schulz said.
Texas has the most businesses of any state, more than 3.5 million, and the most bankruptcies filed, more than 4,500, according to the data. Texas had 129.7 bankruptcy filings per 100,000 small businesses over the year analyzed, the third-highest rate in the U.S.
Business bankruptcy filings increased 41% in Texas over the past year, the 6th-largest increase in the country, LendingTree told The Center Square.
Louisiana bankruptcy fillings increased from 240 to 441, or by nearly 84% over the year. New Jersey bankruptcy filings increased from 546 to 979, or by nearly 80% in one year, according to the data.
Bankruptcy fillings increased the most in Louisiana, New Jersey, New Hampshire, the District of Columbia, Minnesota, Texas, Oklahoma, Mississippi, Arkansas and Wisconsin, according to the data.
Bankruptcies are largely due to “higher interest rates, lingering inflation and softer consumer demand,” Schultz said, which “have created a difficult combination for many businesses. When borrowing costs rise at the same time customers become more cautious about spending, companies with thin margins or significant debt often find themselves running out of room to maneuver.”
Nationwide, 93% of bankruptcy filings fell into two U.S. Bankruptcy Code categories: Chapter 7 and Chapter 11. Chapter 7 filings generally involve a business liquidating assets. Chapter 11 allows a business to reorganize debts while continuing operations.
Chapter 7 filings accounted for 56.8%; Chapter 11 for 36.1% of bankruptcies filed over the time period analyzed, according to the data.
Business bankruptcy filings decreased in 14 states over the year, including in Delaware. In the previous year analyzed, 1,563 companies filed for bankruptcy in Delaware, dropping to 600 in the last year. Even though Delaware leads the U.S. with the highest rate of bankruptcy filings, it also leads the U.S. with the largest percentage change of decreased bankruptcy filings of nearly 62%, according to the data.
Following Delaware, North Dakota, Connecticut, Georgia, Maine, West Virginia, Vermont, Alabama, Hawaii, New Mexico, Arizona, Missouri, Illinois and Pennsylvania reported business bankruptcy declines over the year, according to the data.

Read Full Article: https://justthenews.com/nation/states/center-square/delaware-texas-have-highest-business-bankruptcy-filings-us?utm_source=justthenews.com&utm_medium=feed&utm_campaign=external-news-aggregators