Corporate Bankruptcies at 15-Year High

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Since 2024, corporate bankruptcies have surged, reaching levels not seen since the wake of the Great Recession, a clear turning point in the restructuring cycle.

Thanks to persistent inflation and aggressive rate hikes, we are observing one of the most challenging corporate environments in more than a decade. After years of ZIRP, the Federal Reserve’s rate increases in 2022–2023 pushed financing costs to 20-year highs, leaving debt-heavy companies scrambling to cover rising interest expenses.

By late 2024, rated U.S. non-financial corporations carried a record $8.45 trillion in total debt, while interest coverage ratios weakened markedly. As of the first quarter of 2025, the data from the Federal Reserve indicate that the total debt outstanding for U.S. non-financial corporations was $14.0 trillion.

Corporate bankruptcies in the U.S. have climbed to their rapidest mid-year pace since 2010, with recent months delivering the highest monthly totals in five years. The majority of filings are Chapter 11 reorganizations, a sign that companies are attempting to survive high debt costs, tariff-driven expense shocks, and weakening demand. But the courtroom story has a parallel in the job market: large-scale layoffs are cutting across technology, energy, manufacturing, nonprofits, government, and higher education. Toobtainher, these trfinishs point to a restructuring cycle that is both deep and far-reaching and unlikely to crest in 2025.