Rising Bankruptcy Filings Signal Increased Risk for Creditors in 2026
New data released by Epiq AACER confirms that bankruptcy filings continue to rise across both the commercial and consumer sectors, highlighting the importance for creditors to remain vigilant in protecting their rights.
During the first half of 2026, subchapter V chapter 11 filings increased by 50% over the same period in 2025, climbing from 1,107 to 1,663 filings. Designed to provide small businesses with a more efficient path to reorganization, Subchapter V has become an increasingly common option for financially distressed companies.
Overall bankruptcy filings also increased significantly. Total filings reached 310,550, a 12% increase year over year. Commercial bankruptcy filings rose 13%, while chapter 11 filings increased 28%, reflecting continued financial pressures on businesses from higher borrowing costs, increased operating expenses, and ongoing economic uncertainty.
For creditors, these trends underscore the growing likelihood of customers, borrowers, tenants, and business partners seeking bankruptcy protection. Early recognition of financial distress and prompt action can help preserve claims, protect collateral, and maximize recoveries.
Bankruptcy proceedings move quickly, and creditors that fail to respond promptly may lose valuable rights. Whether the case involves a Chapter 11 reorganization, a Subchapter V proceeding, or a Chapter 7 liquidation, understanding the applicable deadlines, asserting claims, evaluating preference and fraudulent transfer issues, and monitoring the debtor's proposed course of action are all essential to protecting a creditor's interests.
The June 2026 data reinforces this trajectory. Subchapter V elections increased 28% compared to June 2025, while commercial chapter 11 filings rose 29%, suggesting that financial distress among businesses remains elevated.
As bankruptcy filings continue to increase, creditors should review their credit practices, monitor financially vulnerable counterparties, and seek legal guidance promptly when a customer or borrower files for bankruptcy. Experienced bankruptcy counsel can help creditors navigate the process, preserve their rights, and position themselves for the best possible recovery.