Introduction
Corporate bankruptcy filings in the U.S. reached alarming levels in 2025. According to data from S&P Global Market Intelligence, approximately 446 filings were recorded by large public and private companies by the end of July 2025, the highest number for that seven-month period since 2010. These filings reflect the increasing pressure on businesses, especially those with significant debt, exposure to higher interest rates, and operational difficulties. This article examines the magnitude of this increase, its causes, sectoral details, and its implications for investors, creditors, and the broader economy.
Magnitude and Trend
In June 2025 alone, 63 bankruptcy filings were recorded by companies with at least $2 million in assets or liabilities (public companies) or at least $10 million (private companies), the highest monthly figure for the first half of the year since 2010. S&P Global
As of the end of July, the year-to-date total of bankruptcy filings stood at 446. S&P Global+1
For large companies with assets exceeding $100 million, Cornerstone Research reported that, during the 12-month period from the second half of 2024 to the first half of 2025, 117 large companies filed for bankruptcy, up from 113 the previous year and approximately 44% above the annual average of 81 recorded between 2005 and 2024. PR Newswire+1
Within that total, 17 large-scale bankruptcy filings (companies with more than $1 billion in declared assets) occurred in the first half of 2025 alone, a record for a single semester. PR Newswire
In short: Bankruptcies among large companies are not only increasing in number, but also in magnitude.
Key Drivers of the Boom
Several important factors are contributing to this phenomenon:
1. High Interest Rates and High Debt Service Costs
Many companies are carrying high levels of debt due to the low interest rates of previous years. Since the Federal Reserve has kept benchmark rates high for an extended period, borrowing costs remain high. According to S&P Global: “Companies are facing high interest rates…” (S&P Global)
2. Lower Consumer Demand / Macroeconomic Obstacles
In sectors such as consumer discretionary and industrials, lower demand, inflation-adjusted pressures, and supply chain issues are directly impacting earnings. For example, these sectors dominated bankruptcy filings: industrials and consumer discretionary accounted for more than half of the filings in July (S&P Global+1).
3. Policies, Regulations, and Pressures on Operating Costs
Some large companies cite changes in regulations, trade policies, or tax and energy policies as contributing factors to their financial difficulties. The Cornerstone report noted that 67% of mega-bankruptcies in the manufacturing sector pointed to the regulatory, legal, and political environment as a primary factor. PR Newswire+1
4. Maturation of Leveraged Business Models Prone to Restructuring
Companies used to invest or expand aggressively when credit was cheap; now, with that model under pressure, many are struggling to restructure or manage their debt. The rise in long-term debt management (LMT) transactions is evidence of this: companies are using out-of-court restructuring as a step prior to or alternative to bankruptcy. Cornerstone Research+1
Sector Patterns and Key Cases
Sectors: The industrial and consumer discretionary sectors dominate bankruptcy filings for 2025 to date (through July). S&P Global
Among the largest bankruptcy filings in July were companies with liabilities exceeding $1 billion, such as a healthcare provider and a subsidiary of a food company. S&P Global
The manufacturing sector shows marked strain: a high proportion of mega-bankruptcies cite policy and regulatory issues. PR Newswire
Implications for Stakeholders
For creditors and lenders: Increased bankruptcies imply higher credit risk and potentially lower recovery rates. Large-scale bankruptcies reduce the availability of viable collateral and the time available for restructuring.
For investors and shareholders: The higher volume of bankruptcy filings signals a weaker business environment. This could affect market valuations, sector outlooks, and risk premium calculations.
For the economy: While this increase doesn’t necessarily imply an imminent systemic crisis, it does suggest greater strain in several sectors. If many companies go bankrupt simultaneously, it could trigger cascading effects on employment, the supply chain, and credit markets.
For management and strategy: Companies will need to pay close attention to debt maturities, refinancing risk, liquidity, and cost control. For companies in weak sectors, early restructuring might be preferable to sudden bankruptcy.
Outlook and considerations: If the trend continues, bankruptcy filings for the full year 2025 could exceed the total for 2024. Some reports predict that this year’s total will surpass last year’s, given the pace through July. Newsweek
A key question: Will interest rates fall (reducing debt service pressure)? Some market participants expect rate cuts to improve the environment for struggling companies.
S&P Global
Another factor: Changes in policies and regulations could exacerbate or mitigate difficulties, depending on the sector. For example, the energy, manufacturing, and international trade sectors are sensitive to policy changes.
Macroeconomic risk: If consumer demand deteriorates further (due to inflation, weak employment, etc.), more companies will face earnings shortfalls, increasing the likelihood of bankruptcy.
Conclusion
The surge in U.S. corporate bankruptcies during the first seven months of 2025 reflects the growing pressures on companies across all sectors: high debt, high interest rates, cost inflation, regulatory and political hurdles, and lower demand. With approximately 446 bankruptcy filings by the end of July—the highest number for that period since 2010—and a number of mega-bankruptcies on the horizon, the corporate distress landscape is complex.
While this doesn’t necessarily signal an immediate systemic collapse, it is a clear warning sign. Investors, creditors, and corporate management must adapt to a more fragile environment where refinancing risk, liquidity risk, and operational resilience are crucial. For companies, proactive risk management and restructuring capabilities are more important than ever. For markets, this trend underscores the need to consider a higher risk of default, especially in vulnerable sectors.
If you’d like, I can provide a graphical breakdown by sector, highlighting the main filings and analyzing the regional/asset size patterns of these bankruptcies in 2025.