For more than a decade, the number of individuals and businesses filing for bankruptcy steadily declined from 2010 to June 2022. But since then, the number has increased.
The number of bankruptcies this year is almost 12% higher than last year, according to new data from the U.S. Administrative Office of Courts.
Corporate bankruptcies this year have so far increased by 11.4% compared to last year.
People with car loans have also been affected.
More Americans now owe a record $1.68 trillion in auto loan debt, monthly payments have jumped nearly 40% since 2018, and subprime loan delinquencies are at their highest level in more than 30 years.
Delinquency rates are quickly becoming one of the most pressing and underreported financial pressure points facing American households today, says Zach Szewska, automotive retail analyst at CarEdge.
“Consumers are struggling with rising vehicle prices, longer loan terms, higher interest rates and reduced affordability,” Szewska said.
The average monthly car payment has now risen to about $680, with some estimates putting it closer to $760 per month. Meanwhile, more and more borrowers are taking out loans for seven years or more just to cover transportation costs.
Subprime auto delinquencies are now more common than at any time in the past 32 years, with a record number of borrowers 60 days or more late on their payments, according to Fitch ratings data.
Zach Szewska says several key factors need to be addressed for consumers to face rising car costs.
These include:
Auto debt is quietly becoming America’s next big household crisis.
How pandemic-era auto inflation permanently changed car affordability.
Consumers need to avoid falling into risky long-term loans.
Most buyers underestimate the true monthly costs of owning a vehicle.
How to normalize payments that dealers and financiers cannot make.
Why used cars are no longer providing the affordable relief consumers expect, and whether take-backs are likely to continue to increase in 2026.
