According to AIS bankruptcy filing data, U.S. bankruptcies totaled 54,709 in July, up 2,391 from June and up 5,059 from July 2025, a 10.19% year-over-year increase.
We didn’t expect to see much rise from June to July since it’s historically been a near-flat transition. Filings have risen in 11 of the last 20 Julys and fallen in 9. This year they rose 4.6%. Two consecutive months defying their seasonal patterns in the same direction. That's becoming a trend.
The second thread running through July's numbers is convergence. At 12.70% below the pre-Covid July average, July was the closest any month this year has come to historical norms. The market is elevated and building, and it is now closing in on pre-pandemic filing levels faster than the year-to-date trend would have suggested heading into the summer.
July confirmed what June suggested. The sharp drift toward Chapter 7 that defined the first half of 2026 has stopped.
Chapter 7's share of consumer filings held at 63.8% in July, essentially flat with June's 63.7%. That follows a peak of 66.6% in March. Chapter 13 has climbed back to 36.7%, nearly where it started the year at 39.1%.
Two months of stability after a sharp Q1 shift is meaningful. We see this pattern across the portfolios we service. The mix of cases coming in has shifted back toward repayment plans, suggesting consumers filing now are slightly less financially depleted than those who drove the March surge.
Chapter 11 deserves a separate note. After posting 31% year-over-year growth in June, it fell 22.4% year over year in July. That kind of month-to-month swing in commercial filings is not unusual given the small absolute numbers, but it does temper the commercial stress narrative from last month. Subchapter V continues to run well above last year, up 23.7%, which is a more consistent signal of small business pressure building gradually rather than spiking.
Seven months in, 2026 is on track to finish roughly 12% above 2025 and approximately 16% below the pre-Covid annual average of 760,000. The path back to pre-Covid norms around 2028 remains intact.
The YTD gap to pre-Covid norms stands at 19.67% through July, down from 20.78% through June. That 1.11-point improvement is the largest single-month narrowing of 2026. For comparison, the gap actually widened in March, May, and February as surges in filing activity outpaced the seasonal baseline. July reversed that pattern decisively.
At the monthly level, July came in 12.70% below its pre-Covid average, the closest any 2026 month has gotten to historical norms. The convergence is real and it appears to be accelerating. Whether that pace holds through the second half will depend heavily on what the economic indicators do between now and year-end.
The top ten states in July:
The volume list is familiar. The growth rates are where July tells a more interesting story. Texas posted a 35.8% year-over-year increase in consumer filings, the highest of any large state this month. Georgia followed at 28.9%. Both states have been running hot for several months, but July's numbers represent an acceleration. Florida came in at 16.7% growth, Tennessee at 14.7%.
Illinois moved above Ohio in the top ten for the first time this year, a quiet shift worth watching. New York was the only top ten state to post a year-over-year decline, down 2.2%. That divergence between the South's continued growth and New York's softness is a regional signal that hasn't appeared in prior months.
The foreclosure data adds important context. ATTOM's June report showed Texas and Florida leading the country in H1 2026 foreclosure starts with 20,739 and 20,358 respectively. Both states also lead in bankruptcy filing growth. That overlap continues to point toward sustained Chapter 13 pressure in those markets as the foreclosure pipeline works its way through the system over the next 6 to 12 months.
The most significant economic development in July wasn't a data release. It was a split vote. At the July 28-29 FOMC meeting, the Federal Reserve voted 9-3 to hold the federal funds rate at 3.50% to 3.75%. Three regional bank presidents dissented, favoring a quarter-point rate increase. That's the first meaningful dissent of the Warsh era and signals that the internal debate about whether current rates are sufficiently restrictive is no longer settled. For borrowers and servicers trying to model when rate relief arrives, the answer just got less predictable.
The CPI data gave the dissenters something to work with. June CPI came in at 3.5% year over year, down slightly from April's 4.2%, but the monthly reading was -0.4% on a seasonally adjusted basis, a genuine cooling signal. The tension between a moderating monthly trend and a still-elevated annual rate is exactly the kind of mixed picture that produces dissent. Chair Warsh has made inflation the primary focus, and with three colleagues now publicly favoring a hike, the probability of near-term rate cuts has diminished further.
The New York Fed's Q2 2026 Household Debt and Credit Report releases August 11. That will be the first update on consumer delinquency trends since Q1, when serious mortgage delinquency had ticked up to 1.5%. Given the foreclosure data, the consumer filing trends, and the rate environment, the Q2 delinquency picture is likely to be one of the more closely watched data releases of the summer. ATTOM's June foreclosure data reinforces the concern: foreclosure starts rose 20% year over year, completed foreclosures jumped 23%, and H1 2026 foreclosure activity totaled 227,548 properties, up 21% from the same period in 2025.
July extended a pattern that is becoming harder to dismiss. Two consecutive months rising against their seasonal norms. The pre-Covid gap narrowing faster than at any earlier point in 2026. A filing total that ranks as the highest July since 2019. The filing environment is converging toward historical norms at a pace that is ahead of where the year began.
The economic backdrop adds urgency to that read. A split FOMC vote, still-elevated inflation, a foreclosure pipeline running 20% above last year, and a household debt report landing August 11 that could sharpen the delinquency picture further. None of those resolve in a direction that points toward lower filing activity.
With RFP and budget seasons approaching for 2027 planning, now is a practical time to evaluate whether current data and servicing capabilities are built to scale with a filing environment that keeps moving higher. Organizations that get ahead of both questions now will be better positioned than those that wait for year-end to find out.
Data sourced from the AIS proprietary bankruptcy database, compiled daily from U.S. court records (PACER) since 2000.