As compassionate consumer bankruptcy attorneys, we see firsthand the emotional and financial toll debt can take on individuals and families. Recent bankruptcy statistics for 2024 highlight a sharp rise in filings across the country, including in California, where personal bankruptcies are accelerating at the fastest pace since the early days of the pandemic. While these numbers may seem alarming, they also signal an important truth: bankruptcy remains a vital safety net for those struggling under the weight of overwhelming debt.
Breaking Down the Numbers
The data shows a 14% year-over-year increase in total bankruptcy filings across the United States, with 508,758 filings in 2024 compared to 445,286 in 2023. Even more striking, personal bankruptcy filings in California are occurring at a rate of 40 per 1,000 people, marking a 25% increase in just one quarter and a 38% jump from 2023 to 2024.
These figures reflect the economic pressures many Americans are facing, including rising interest rates, inflation, and the expiration of pandemic-era financial relief programs. But while these increases are significant, it’s important to note that total bankruptcy filings remain below pre-pandemic levels, when 757,816 bankruptcies were recorded in 2019.
Bankruptcy is a Fresh Start, Not a Failure
Bankruptcy is not a sign of financial failure but rather a strategic legal tool designed to provide relief and a fresh start. The stigma surrounding bankruptcy often prevents people from seeking help sooner, leading to prolonged financial distress, and the loss of assets that could have been protected, such as home equity, retirement, and emergency savings. The reality is that bankruptcy laws exist to help hardworking people regain control of their lives, discharge overwhelming debt, and rebuild their financial future. In fact, the U.S. Supreme Court stated it best when it ruled that bankruptcy is for the honest but unfortunate debtor.
What Should You Do If You’re Facing Financial Hardship?
If you are struggling with debt, you are not alone, and options are available:
- Assess Your Debt: Take a clear look at your income, expenses, and obligations. If you are only making minimum payments or relying on credit for necessities, it is time to consider legal options.
- Consult a California State Bar Certified Bankruptcy Specialist: Speaking with an experienced bankruptcy attorney can help you understand whether Chapter 7 or Chapter 13 bankruptcy is right for your situation.
- Bankruptcy Attorneys are the most knowledgeable and experienced at explaining your bankruptcy and non-bankruptcy options.
- Act Sooner Rather Than Later: Many wait until they are facing lawsuits, wage garnishments, or foreclosure before seeking help. The earlier you explore your options, the more control you have over the outcome.
- Avoid Debt Relief and Debt Settlement Companies! These companies prey on consumers. They have a horribly low success rate. They cannot protect you from lawsuits, liens, or wage garnishments. By the time you realize the debt settlement plan is impossible, you will have wasted months of payments that could have been used to simply file for bankruptcy protection.
A Future Beyond Debt
While the rise in bankruptcy filings reflects financial hardship, it also demonstrates that people are taking steps to regain stability. Bankruptcy is not the end of the road—it’s a new beginning. Most clients reestablish a good credit rating of 670 or above within 12 months. You can purchase a home or refinance using an FHA loan just 12-18 months after bankruptcy, provided you meet the other FHA qualification guidelines.
Our mission as bankruptcy attorneys is to provide guidance, dignity, and support to those facing financial distress. If you or a loved one are struggling with debt, know that there is a path forward, and we are here to help. Call (844)894-4440 to schedule an appointment with Jenny L. Doling. She has handled more than 7,000 cases over the past 25 years, and she personally meets with each client.
Author: Jenny L. Doling, Esq., LLM Taxation
CA State Bar Certified Bankruptcy Specialist
Secretary and Board of Director of NACBA
President of the San Diego Bankruptcy Forum
Serving Bankruptcy Clients throughout California and
Tax Clients Nationally