Bankruptcy Filings Up In CA, Nationwide: Study

CALIFORNIA — Bankruptcy filings are on the rise nationwide, including in California, which was among the 10 states with the highest recent increases in cases filed, one ranking found.

The study used court data from June 2023 to June 2024 to determine which states saw the biggest case spikes. It was conducted by personal injury attorneys The Schiller Kessler Group.

California ranked sixth on the list with a 28.6 percent increase in cases between 2023 and 2024, which, adjusted for population, came out to a rise from 87 cases per 100,000 people to 111 cases, according to a news release from the firm. Nevada ranked fifth with a 29.1 percent increase and Minnesota was seventh with a spike of 27.2 percent.

“There are several factors driving the rise in bankruptcy cases across the U.S.,” a spokesperson for the law firm said. “These factors include consumer debt, medical expenses, job loss, and the ongoing increase in the cost of living.

“Economic uncertainty, driven by inflation, rising interest rates, and concerns about a potential recession, is putting significant strain on personal finances. Additionally, growing credit card balances and personal loans, when used excessively, can become difficult to fully repay. Rising costs for food, housing, and healthcare are also contributing to financial strain, alongside layoffs in certain industries. Without a steady income, it becomes nearly impossible to stay afloat, leading more people to file for bankruptcy.”

The states with the largest increases in filings were Delaware at 61.7 percent, Washington at 36.5 percent and New Mexico at 33.6 percent. The only states that saw a decrease in filings were Rhode Island, down 0.7 percent, Maine, down 3.9 percent, and Alaska, down 5.5 percent.