Many people hesitate to file for bankruptcy because they feel there is something shameful about doing so. They feel that it would be admitting they failed.
The truth is, bankruptcy is more often the result of the state of the world we live in than any individual error or shortcoming.
An 11% total rise in filings
According to the federal government, there was an 11% increase in the number of bankruptcies between the start and end of last year. The was a rise in every type of bankruptcy, so that means both businesses and individuals are struggling. It was not a one-off bad year, either. Total filings have risen every quarter since June 2022.
What is causing this?
Making ends meet continues to get harder for many people as well as businesses. Grocery bills have shot up in recent years, and rents and house prices have become increasingly unaffordable in many areas. The cost of health care has risen, and interest rates on debts have often gone up, too.
This might all be manageable if jobs were plentiful and wages rose accordingly. Unfortunately, that is not the case. Businesses, too, face struggles with rising competition, rising supply costs, increased rents and customers with less to spend.
Meanwhile, the wealth held by the world’s billionaires grew 18% during 2025. It has grown 80% since 2020.
If you grew up being told that the playing field was level and that anyone can thrive if they work hard enough, it can be distressing to find that you are unable to make ends meet and are in debt you cannot get out of. If you accept that what you were told is not really true, then it may become clearer that bankruptcy is an option you should have no shame about using.