Filings pull back more than usual, yet still post the strongest May since 2019
According to AIS bankruptcy filing data compiled daily from PACER, filings totaled 51,748 in May, down 4,705 from April and up 3,385 from May 2025, a 7.0% year-over-year increase.
May will get filed under 'down month' by anyone who stops at the headline. Filings fell 8.3% from April, more than the typical seasonal dip of about 2.6%, and the month-over-month move looks soft on the surface. Look a little closer and the story flips. At 51,749, May was the strongest result for the month since 2019. The market didn't retreat. It settled at a level it hasn't occupied in years, then pulled back within that range. That's a very different thing than cooling off.
The chapter story in May is less about the volume and more about the mix. And the mix keeps telling the same story.
Chapter 7 and 13 together were 98.4% of all May filings. The drift within that pair is what matters. Chapter 7 started the year at about 61% of consumer filings, climbed to 66% by March, and came in at 65% in May. Chapter 13 moved the other way. That shift toward liquidation and away from repayment plans isn't noise. It reflects consumers who are deeper into distress, past the point where restructuring makes sense. We see this pattern across the portfolios we service. Subchapter V jumping 30% year over year is worth flagging too. Small business pressure is building. It just isn't moving the national count yet.
Two months into Q2, filings total 108,203, up 10.3% from the same two months in 2025. Q1 closed at 150,089, the strongest first quarter since 2020, and Q2 opened even higher than Q1 did. January came in at 45,836. April, Q2's first month, came in at 56,454. That's a 23% higher starting point going into the second quarter. June will tell us whether that momentum carries through or gives some back.
Five months of actuals plus seasonal patterns from the four most recent full filing years point to a full-year 2026 range of 614,000 to 655,000 filings, base case near 634,000. That's up roughly 12% from 2025's 566,227 and would be the highest annual total since 2020 under any scenario.
The second half typically accounts for about 48% to 50% of annual filings, with August and October running stronger and November and December softer. Nothing in the current data suggests a meaningful departure from that pattern. What it does suggest is that the back half of 2026 looks a lot like the front half did — elevated, consumer-driven, and not going quietly in the other direction. That's the number to plan against.
The pre-Covid annual filing average was approximately 760,000. Filings bottomed at 378,441 in 2022, about 50% below that level, and have been closing the gap at about 8 to 9 percentage points per year since. The gap was -26% at end of 2025. The 2026 base case brings it to roughly -17%. At that pace, the market gets back to pre-Covid territory around 2028.
Three ways that could play out:
The normalization scenario fits the data best right now. YoY growth has been decelerating: 17.7% in 2023, 14.4% in 2024, 11.1% in 2025. But nothing in the economic backdrop suggests a plateau is close. Re-acceleration isn't the base case, but it isn't far-fetched either. Under any of the three scenarios, filings don't return to 2021–2022 levels. That era is over.
The top ten states in May:
Indiana's entry into the top ten, displacing Alabama, is a quiet signal. Indiana has been building steadily through 2026, and alongside Ohio, Illinois, and Michigan it points to a Midwest volume story that doesn't get as much attention as the Sun Belt. Both regions are contributing. This isn't a one-region trend.
The more pointed geographic signal is the foreclosure overlap. ATTOM's April report put Delaware, South Carolina, Florida, Indiana, and Illinois among the states with the worst foreclosure rates nationally. Four of those five are also top bankruptcy filing states. That's not coincidence. Foreclosure stress and bankruptcy filings pull from the same distressed household pool. For servicers with concentrated exposure in Florida, Indiana, or Illinois, the pressure isn't spreading evenly across a national book. It's compounding in the same places at the same time.
The Fed cut rates to 3.50%–3.75% in April, which sounds like progress until you remember that rate cuts take months to reach household budgets, if they reach them at all. Mortgage rates remain elevated, and for most borrowers relief isn't here yet. What is here: CPI at 3.8% year over year in April, up from 3.3% in March, with energy (+17.9%) and shelter both pushing higher. For a household already stretched on debt payments, prices moving up while rate relief moves slowly is a punishing combination.
The New York Fed's Q1 2026 Household Debt report put total debt at $18.8 trillion. Early delinquency ticked down for credit cards and mortgages, a modest positive, but serious mortgage delinquency nudged from 1.4% to 1.5%. Small move, significant direction. It connects directly to what ATTOM is seeing in foreclosures: 42,430 filings in April, down 8% from March but up 18% year over year. The monthly dip is seasonal. The annual increase is what feeds the Chapter 13 pipeline over the next several quarters, and what our servicing teams are already preparing for.
Don't let the month-over-month number write the wrong story. May was the best May in seven years. The YTD is running 12% above 2025. The economic backdrop isn't pointing toward a cooldown. The filing environment has shifted to a higher level, and the data says it's staying there.
The full-year projection of 614,000 to 655,000 and a return to pre-Covid norms around 2028 are a planning framework, not a guarantee. What they point to is a window, probably the next 12 to 18 months, where the organizations that take this seriously can get meaningfully ahead of what's coming. We see the operational reality of these numbers every day across the portfolios we service. The institutions building capacity now, revisiting staffing models, and stress-testing their workflows against a 600,000-plus annual filing environment are making the right bet. The ones still treating each month's number as a surprise are going to keep being surprised.
Data sourced from the AIS proprietary bankruptcy database, compiled daily from U.S. court records (PACER) since 2000.