Okay bestie, sit down for this one because the tea is piping hot.
Bankruptcy filings in the US just jumped to a level we haven't seen since way back in 2020, and the internet is spiraling.
We're talking a 17% spike in just one year.
Millions of people are quietly hitting the reset button, and honestly?
Here's the breakdown: total bankruptcy filings in 2025 climbed past 540,000.
Chapter 13 — the one where you keep your stuff and pay it back — is leading the charge.
Chapter 7, the full wipe-the-slate clean energy, is right behind it.
It's giving main character energy, but in a sad way.
Credit card debt sitting at record highs because everything costs a gazillion dollars now.
When your rent eats 40% of your paycheck and eggs cost more than your streaming subscription, something's gotta give.
And for a lot of people, that "something" is filing.
But here's the plot twist nobody talks about: bankruptcy isn't the villain in this story.
It stops the debt collectors from calling you at 6am.
It can wipe out certain debts completely.
It puts you back on the board instead of watching from the sidelines forever.
Gen Z and millennials are treating it like closing an app that crashed — you just restart it and move on.
Some debts — like student loans, most of the time — don't vanish.
And you need a lawyer, which costs money, which is ironic when you're broke.
It's the fact that so many people are drowning that filing became a trend.
And when the system squeezes, people find the emergency exit. **The takeaway:** Bankruptcy was never about being bad with money.
Final Thoughts
If you're drowning, an off-ramp beats pretending you're fine.