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More people are filing for bankruptcy in 2026. With a seemingly endless news cycle focused on high prices, inflation, elevated interest rates, and financial uncertainty, it’s no surprise to see bankruptcy filings increase across the US. Bankruptcy filings reached a five-year high in 2025, totaling 533,949, a 12% increase from 2024. We expect that trend to continue into 2026. At Veitengruber Law, we have seen this trend personally as more New Jersey residents file for bankruptcy. Year after year, we have seen more folks making the decision to file for bankruptcy. We tell our clients that every bankruptcy case is different—because it is. No two bankruptcy filings will be the same because the people filing for bankruptcy come from different personal, financial, and logistical circumstances. However, when we see overarching trends like we are currently seeing, it points to a bigger picture. Here, we will explore the broader causes of the increase in bankruptcies. Delayed Filings Bankruptcy filings are almost never caused by current economic conditions. Instead, they are typically caused by economic events months or even years ago. The big-picture conditions that often lead to individual bankruptcy filings take a while to trickle down to the average person. Folks also tend to hold off on filing for bankruptcy as long as possible, long after they likely needed to file. Bankruptcy has a ton of negative connotations associated with it. Many people can experience feelings of shame, guilt, and despair when they are considering filing for bankruptcy. And while bankruptcy certainly comes with some trade-offs, it is often the financial reset required to get back to financial health. Still, these negative connotations can further delay filings. Big Picture Causes for Bankruptcy As discussed above, the decision to file for bankruptcy is often deeply personal and will vary from person to person. No two bankruptcy filings are exactly the same. That said, Economists have identified several economic factors over the past few years that have led to a general increase in bankruptcy filings. Those include: Rising Medical Costs: Health insurance premiums have been increasing annually, and more Americans are choosing to forego coverage to maintain their already tight budgets. With the cost of healthcare surpassing many Americans' means, more and more individuals and families are finding themselves saddled with unmanageable healthcare debt. One unexpected medical emergency can lead to bankruptcy. Increased Credit Card Debt: According to Lending Tree , US credit card debt has reached an all-time high of $1.28 trillion. As the cost of living exceeds many Americans’ budgets, more and more consumers are turning to credit cards to make ends meet. With high interest rates, using a credit card for groceries, gas, or other basic needs can quickly snowball into an unmanageable pile of high-interest debt. Student Loan Payments Restarting: The Trump administration is set to resume wage garnishment on student loan borrowers in default in 2026. Some notices have already gone out to borrowers in default on their federal student loans. While it is not clear how much people can expect to be garnished from their paychecks, this will be another financial blow to struggling individuals and families. Income Disparity: As the cost of living gets higher, incomes are simply not rising to meet the increased costs. So, while it costs the average consumer more to heat the house or put food on the table, incomes remain stagnant. As individuals try to keep up with the cost of living and fall behind, they may turn to debt to make ends meet, while at the same time having fewer means to repay it. All of these problems could individually lead to an increase in bankruptcy filings. Together, they are a major catalyst for the financial uncertainties of the average American. With many Americans already living paycheck to paycheck, preparing for emergencies caused by the above issues can be impossible for the average family. An Important Note It is important to point out that while bankruptcies are on the rise, they have not yet reached pre-pandemic levels. Before the 2020 COVID-19 pandemic, bankruptcy levels were much higher. Many economists see the increase in bankruptcies as a return to the pre-pandemic norm. During the pandemic, government funding and lender forbearance programs offered temporary relief measures to many Americans. Now that these programs have ended, we have seen a gradual return to pre-pandemic bankruptcy levels. The concern is that 2026 will see filings surpass even pre-Pandemic levels as more and more Americans face insurmountable debt. Should I file for bankruptcy? The economic issues above point to big-picture problems impacting nearly every American right now, especially the middle and working classes. Not every person grappling with these issues will file for bankruptcy—but the rising rate of filings suggests many Americans are. Bankruptcy is a powerful financial tool. Here are some signs you should consider filing for Increase.docxbankruptcy: 1. Legal and Collections Actions: If creditors are suing you, attempting to garnish your wages, or taking you to court to seize assets to pay back your debts, it may be time to file for bankruptcy. When you file for bankruptcy, you enter into the automatic stay period. During this time, your creditors are not allowed to move forward with legal actions against you. They must also stop all collection efforts until the end of your bankruptcy. 2. Foreclosure or repossession: If you are facing foreclosure, bankruptcy may be the best path to keeping your property. The automatic stay will also pause foreclosure proceedings, giving you time to determine how to keep your home. The same applies to vehicle repossession. Depending on what kind of bankruptcy you file, you can get caught up on your past due payments while still maintaining ownership of your property. 3. Increased Credit Card Debt: If you are using credit cards to pay for basic needs and carrying this debt from month to month, this is a sign that you are financially stretched beyond your means. When your budget cannot keep up with basic living expenses without going into debt, it may be time to consider bankruptcy. __ The big-picture causes of financial stress trickle down to individuals just trying to make ends meet. The cost of eggs at the grocery store is beyond your control, but it does affect your bottom line. If you are facing financial hardship, you have options. Bankruptcy is not a last resort. It can be a lifeline for individuals trying to pull themselves out of unmanageable debt. Vetiengruber Law is an experienced bankruptcy attorney in New Jersey. We have nearly two decades of experience helping NJ residents file for bankruptcy, manage their debt, fight foreclosure, and find a path towards a brighter financial future.

Americans are in debt. According to Experian data , the average American adult’s debt was $104,755 as of mid-2025, with Millennials and Gen X carrying the most debt out of all generational demographics. US credit card debt reached an all-time high of $1.28 trillion in the final quarter of 2025. We have also seen bankruptcy filings and foreclosures increasing throughout 2025 and into 2026. All this data points to a clear picture: Americans are struggling financially. Over the last decade, various debt-forgiveness proposals have been put forward by grassroots organizations, lawmakers, and economists. Some have focused on a single type of debt, such as student loan debt. Others have focused on specific demographics of debt holders, like the elderly. This kind of sweeping cancellation of debt is called a debt jubilee. Some experts believe the US is due for a general debt jubilee. But could it happen here? What is a debt jubilee? A debt jubilee is the cancellation of public or private debt in an effort to combat economic instability. The intention of the debt jubilee is to forgive specific debts for a large group of people, enabling a general economic restart. A debt jubilee has historical precedent, with governments and rulers throughout history enacting them to avoid economic or social crises. In fact, the idea of a debt jubilee goes all the way back to ancient Syria and Babylonia. The US has seen some debt forgiveness and relief efforts in recent years, including large-scale debt relief following the 2008 recession and during the COVID-19 pandemic. Still, many fear the consequences of total debt forgiveness. What kinds of debts would be forgiven with a debt jubilee? Proponents of a debt jubilee policy point to three major areas of debt relief: student debt, medical debt, and consumer debt. Student Loan Debt This is perhaps the most well-known and highly contested of all the proposed debt jubilee ideas. US student loan debt totals $1.78 trillion, with federal loan debt accounting for 92.1%. Student loan debt impacts 42.7 million Americans. During the COVID-19 pandemic and after, student loan repayments were paused. Payments resumed in October 2023, and defaulted loan collections resumed in May 2025. As of January 2026, wage garnishment letters began going out to borrowers in default. At the end of 2025, 5.5 million borrowers were reportedly in default on their federal student loans. Medical Debt Data from 2024 shows that 36% of US households carried medical debt, totaling $194 billion in active collections. Unpaid medical debt tends to be less damaging to credit reports than other kinds of defaulted debt, but it can still lower credit scores and hinder financing options. With rising health insurance costs, more middle- and working-class families are being priced out of medical care. Consumer Debt As stated above, US credit card debt reached its highest level in 2026. Inflation, high living costs, and incompatible income growth mean more Americans are using credit cards to pay for basic necessities. Of all credit card holders, 46 % carry a balance month to month. A debt jubilee in one or more of these areas could stimulate the economy, allowing consumers to spend less money on debt and more money on goods, entertainment, and services. Supporters of a debt jubilee also point to the opportunity for increased economic and social mobility, allowing individuals and families to build wealth and improve their quality of life—thereby limiting the need for social services. What are the criticisms of the debt jubilee? Critics of a debt jubilee argue that large-scale debt forgiveness would cause severe economic disruption. There is concern that widespread debt forgiveness could threaten many of our financial systems that rely on debt to function. For example, while a debt jubilee would help the poor, it could also destroy retirement assets for 401(k) holders whose investments are tied up in the system. Many detractors point to a potential moral hazard—they believe it will lead to increased irresponsible spending. They argue that debt forgiveness is unfair to those who have already paid off their debts. Still, the idea of a debt jubilee is thought-provoking. Proponents and critics alike can agree that the economic conditions in the USA are difficult enough that debt struggles are an issue for many American households. What are your thoughts on a debt jubilee? Veitengruber Law is an experienced NJ law firm focused on debt management, bankruptcy, foreclosure defense, and more. We work with people struggling with unmanageable debt. While a debt jubilee continues to be hotly debated on the national stage, we can help you find solutions to financial issues today.

Just the thought of filing for bankruptcy is enough to send some people directly into a panic attack. The embarrassment, the feelings of failure, and the fear of losing everything keep many people from exploring what bankruptcy is all about. If you’re facing some financial hurdles and have considered filing for NJ bankruptcy, let’s talk about why it’s so misunderstood and why it’s truly not as bad as its reputation. Big banks and financial institutions have kept the pressure on borrowers for so many years that the stigma of bankruptcy has grown into a looming dark cloud. Many debtors are misinformed about bankruptcy, preventing them from utilizing it as the tool it is meant to be. Some of the more common bankruptcy falsehoods include: Fear of losing everything Permanently ruining your credit score Potentially dragging your spouse’s credit score down Losing your home or other important assets Everyone knowing your private financial business Gaining a reputation as a reckless spender Never being able to buy a house in the future Being blacklisted by banks for future loans Friends and family thinking less of you Incorrectly assuming that filing for bankruptcy is too complicated Most of the above fears are simply not founded in reality, and while some of them may hold a kernel of truth, the reality is that the positives of bankruptcy greatly outweigh any fears that may be preventing you from moving forward. When you work with Veitengruber Law, a bankruptcy law firm in New Jersey, you’ll understand that changing your perspective can very likely mean the difference between clearing your financial hurdles or hitting every single one as you continue to struggle along through life. First, and foremost, filing for a New Jersey bankruptcy puts an immediate stop to creditor calls and letters. As soon as your creditors learn that you have filed for bankruptcy, they are no longer permitted to bother you. If they continue to call or send mail, they’ll be in violation of the law. This is typically a huge relief to our clients, as it takes a huge amount of pressure off and gives them some breathing room. With the pressure cooker turned down to low, you can work with our bankruptcy team to decide which type of bankruptcy is best for your unique situation. We know New Jersey bankruptcy well, and with us by your side, you can rest assured that your decisions will all be the right ones. We’ll help you sort through all of your financials – from how much you owe creditors, to late fees, interest rates, and more. If your house is in danger of foreclosure, we can help with that, too. In fact, filing for bankruptcy in New Jersey puts foreclosure into “Automatic Stay” status, and your lender cannot move forward on foreclosing while your bankruptcy case is active. This gives us ample time to work toward righting your financial situation, deciding what, if any, of your assets you want to liquidate, and determining the best decision regarding keeping your home. Sometimes downsizing might be the right answer, but many of our clients can continue living in their homes after a loan modification. Just knowing that you have options is enough to ease most everyone’s fears. Filing for bankruptcy will impact your credit score, but only temporarily. Our credit repair specialist will help you work toward bringing your score back up as quickly as possible. You will be able to apply for and be approved for a loan again in your (dare we say near) future! If you don’t own a home currently, home ownership is definitely still in the cards for you after a bankruptcy. Is bankruptcy such a bad thing? No! Here at Veitengruber Law, we love bankruptcy and we work hard to educate our clients about the possibilities that filing for bankruptcy can bring. It’s not a magic pill, and you will have to make some sacrifices, but it is an extremely useful tool when used in conjunction with the right NJ bankruptcy team, credit repair strategies (we will help you implement these as we move through the process), and looking beyond your bankruptcy discharge toward a new approach to finances. We want you to view bankruptcy as a launch pad that not only isn’t shameful, but that is the leg up you maybe didn’t even know you needed. When incorporated with a big picture plan, your future can look bright again, and your money stressors will decrease while your credit score goes up, up, UP!

At the end of 2025, foreclosure activity increased across the United States. In the month of December, national foreclosure filings totaled 44,990 properties—up 26% from November 2025 and a staggering 57% from December 2024. The state with the highest foreclosure rate is New Jersey, with 2,178 foreclosure filings in December 2025. Experts point to many factors behind the increase in foreclosures nationwide: financial instability, a difficult job market, high prices for basic goods, and more. Incomes are not rising to keep pace with the rising cost of living, making it increasingly difficult for the average American to make ends meet. But the whys and hows of foreclosure rates at the macrocosmic level do not mean much to NJ homeowners struggling with the very real possibility of losing their home. Veitengruber Law is here to help. We have worked with NJ homeowners for years to ensure their rights are protected. Here are just a few ways we can protect you and your home from foreclosure. Loan Modification Struggling with your mortgage payments? A loan modification may provide the relief you need. A loan modification restructures the terms of your existing mortgage to better align with your current financial situation. While a modification does not guarantee a lower monthly payment, it is intended to make your loan more manageable and sustainable over the long term. Depending on your circumstances, a modification may: Adjust your interest rate Extend your repayment term Add past-due payments to your loan balance Modify other loan terms to improve overall affordability Once a complete application is submitted and under review, foreclosure proceedings are typically placed on temporary hold. If the modification is approved, foreclosure proceedings are discontinued. A mortgage modification is designed as a long-term solution to help you remain in your home. Veitengruber Law has worked with many NJ homeowners to get a load modification approved. We know what lenders are looking for and how to negotiate terms that support our clients' financial well-being. Bankruptcy Filing for bankruptcy is one of the most effective ways to stop foreclosure proceedings. From the moment you file Chapter 7 or Chapter 13 bankruptcy, you enter into the “automatic stay” period. During this time, creditors and lenders are not allowed to pursue collection efforts—including foreclosure proceedings. Bankruptcy law also allows filers to exempt certain property from the bankruptcy estate. This can include protections for your home equity, such as the federal home equity exemption, which allows you to protect up to $31,575 in equity in a primary residence. Which Kind of Bankruptcy is Right for You? Chapter 13 bankruptcy allows you to restructure your debt into a court-approved repayment plan to be paid over 3 or 5 years. At the end of the repayment plan, any unpaid debt is forgiven. This includes mortgage arrears. Chapter 13 is a great option for those who can afford to stay in their home and just need help digging out of unmanageable debt. Chapter 7 bankruptcy can delay foreclosure, but your options for protecting your home may be limited depending on your situation. Filing for Chapter 7, otherwise known as liquidation bankruptcy, means your assets can be liquidated to pay back your creditors. If you have little equity in your home, or you can fully protect your equity with the above-mentioned bankruptcy exemptions, there is a good chance you will not lose your home as long as you are current on your mortgage. Veitengruber Law is an experienced bankruptcy and foreclosure attorney and law firm in New Jersey. We offer knowledgeable, compassionate legal advice and defense for NJ homeowners facing difficult times.

When you hear the term “clawback” in reference to bankruptcy, your mind may go to high-profile cases like the Bernie Madoff Ponzi scheme bankruptcy or similar cases with Lehman Brothers, Bayou Hedge Fund, Nine West, and more. But clawback provisions in the U.S. Bankruptcy Code are tools that can be used in any bankruptcy. A bankruptcy clawback can potentially allow for the recovery of assets transferred out of your ownership in the 90 days before bankruptcy. The purpose of a clawback is to ensure equal and fair treatment of all creditors and to deter bankruptcy filers from engaging in fraudulent activities. If you are being asked to return funds in a clawback situation, it is important that you understand your rights and what kind of legal defenses are available to you. Veitengruber Law can help you assess the claim and determine the best way to protect your assets. What does a clawback action do? In the Bankruptcy Code, the clawback action, also known as an avoidance action, is a policy intended to ensure that all creditors are paid back equally. In all types of bankruptcy proceedings, the legal processes are not adversarial or litigation-based. Bankruptcy is intended to give folks a path towards better financial health—not punish them for financial mistakes. But clawback actions are separate legal proceedings that are referred to as bankruptcy litigation. Sections 547 and 548 of the Bankruptcy Code authorize the trustee or debtor in possession to “claw back” asset transfers made by the debtor prior to bankruptcy. Fraud deterrent: Giving bankruptcy trustees the authority to clawback assets transferred in the 90-days prior to a bankruptcy filing is intended to help deter debtors from fraudulent activity. Some debtors may seek to hide or get rid of assets before filing for bankruptcy to make their case more personally favorable. But this is illegal, and the clawback option allows trustees the ability to recoup these funds. Equity: All creditors are supposed to be treated fairly under the bankruptcy code. The clawback action gives every creditor the opportunity to share in the debtor's assets, rather than favoring one creditor over another. Estate preservation: Clawback provisions allow recovery of assets belonging to the bankruptcy estate, thereby increasing the resources available to satisfy creditor claims. What is the timeframe? The timeframe to reclaim transferred assets depends on the circumstances surrounding the transfers. One kind of transfer is called a preferential transfer. Under section 547 of the Bankruptcy Code, if the debtor is insolvent, any preferential payments made in the 90 days prior to filing for bankruptcy can be clawed back. This 90-day period can be extended to one year if the recipient of the payment or asset transfer is considered an “insider.” An insider would be a relative, close friend, or business partner. This often happens when insolvent individuals choose to repay debt owed to someone they know personally rather than the debt they owe other creditors. Another kind of transfer is fraudulent transfers, covered under section 548 of the Bankruptcy Code. This is any movement of funds or assets out of the debtors possession for “less than reasonable value: while the debtor was insolvent. The lookback period for this is two years under federal law and up to four years under NJ law. So, for example, if you “sell” a vehicle worth $10,000 to a relative for $500 to avoid losing the vehicle through bankruptcy, that is considered fraud. Gifting large sums of money to friends, relatives, and other close associates is also fraud. What is the clawback process like? The bankruptcy trustee can initiate a clawback action by filing a complaint with the bankruptcy court. The complaint seeks court approval to use the clawback provision to retrieve assets transferred in the above-mentioned time frames. The complaint will legally involve the entity or individual who received the assets in the bankruptcy proceedings. From there, the funds will be reabsorbed into the bankruptcy estate, and the court will include these new assets in its equitable distribution to all creditors. What cannot be included in a clawback action? Generally, clawback actions cannot be brought forth to recover regular, timely payments to secured lenders. These payments are considered payments for value received. This would be like your mortgage, car loan, or other secured debt payments. You do not have to stop making regular payments on your debt out of fear that the payments will lead to clawback claims in bankruptcy. However, if the payments were abnormally large, above your normal monthly payment amounts, or non-routine, there could be a case for your trustee to attempt to claw back those funds. Can I legally defend myself from clawback claims? If you are facing a clawback claim, it is critical to understand your rights and any potential defenses you can use in court. Common clawback legal defences include: 1. Ordinary Course of Business The debtor must prove that the payment was made for a debt incurred in the ordinary course of business. This is typically proved by showing historical patterns. This defense is typically used in Chapter 11 bankruptcy to show that debt incurred by a business or entity was legitimate for the business's operations. 2. Good Faith Good-faith arguments are made to show that a debtor acted honestly and transparently, and made a sincere attempt to reorganize or repay debts. Many folks who find themselves dealing with clawback claims did not intentionally set out to commit fraud. When reviewing a good-faith argument, the court will look at the “totality of the circumstances” to make a decision about the intention behind large sum payments in the time before a bankruptcy filing. 3. Statute of Limitations If your assets were transferred outside of the federal or state statute of limitations, they are not eligible for a clawback claim. So, if you sold a property below value to your child ten years ago, this transfer cannot be considered for a clawback claim. Attempts to include these assets through clawback actions can be dismissed in court. How can I prevent bankruptcy clawback actions? Transfers of assets in the months and years before a bankruptcy filing are often made in complete innocence. Not every debtor who finds themselves dealing with a clawback action did anything attempting to defraud the court or their creditors. But unintentional violations of the Bankruptcy Code can still result in clawback actions. The best way to prevent clawback actions is to work with an experienced bankruptcy attorney. You need to be fully transparent with your lawyer and disclose all recent transfers of money or assets. They can help you determine if any actions could be considered fraudulent and how to deal with those issues before you open a bankruptcy case. Veitengruber Law is well-versed in New Jersey bankruptcy law. We understand the intricate complexities of bankruptcy proceedings. In adversary proceedings, clawback actions require different legal skills than in a typical bankruptcy case. Veitengruber Law has experience with bankruptcy litigation. Let us help you protect your assets .