Debt and the City: NYC Bankruptcy Trends to Watch in 2025

Bankruptcy trends It’s a new year in New York—but for many, the same financial pressures continue to mount. If you’re struggling to keep up with rent, bills, or credit cards, you’re far from alone.

NYC bankruptcy trends are shifting fast, and if you’re watching your budget tighten, these changes matter. Whether you’re considering Chapter 7, Chapter 13, or just trying to stay informed, understanding these patterns could save you thousands—or even your home.

Let’s dive into what’s happening in the world of bankruptcy and personal debt relief in 2025.

1. Personal Bankruptcy Filings Are Rising Across NYC

After a lull during the pandemic years (thanks to stimulus checks, rent freezes, and student loan pauses), bankruptcy filings are back—and climbing steadily.

Recent data shows:

A 28% increase in Chapter 7 filings year-over-year
Chapter 13 filings up 19%, especially in Brooklyn and Queens
A spike in filings by middle-income families—not just low-income earners

More New Yorkers are finding themselves one medical bill or rent hike away from financial collapse.

2. Rent Is Still the #1 Budget Buster

With the average one-bedroom rent in Manhattan pushing past $4,100 and no major relief in sight, housing remains the top driver of financial stress in NYC.

Rent burdens often lead to:

Missed credit card payments
Skipped utility bills
Eviction threats and Housing Court appearances

This pressure is pushing more tenants toward Chapter 7 or Chapter 13 bankruptcy as a way to stabilize and restructure their finances.

3. Credit Card Debt at Record Highs

According to Federal Reserve data, Americans now carry more than $1.1 trillion in credit card debt—and NYC residents are among the hardest hit, due to high living costs and inflation.

Most bankruptcy clients we see in 2025 carry:

$25,000–$75,000 in unsecured credit card debt
Multiple cards near or over the limit
Interest rates over 28%

The average bankruptcy discharge can eliminate tens of thousands in credit card debt in just a few months.

4. Student Loan Repayments Are Back—and Causing Trouble

Since federal student loan forbearance ended, borrowers are feeling the squeeze. Many have gone from zero payments to hundreds monthly—on top of already stretched budgets.

While student loans generally aren’t dischargeable in bankruptcy, they often trigger:

Missed rent payments
Reliance on credit cards
Default on other debts

Chapter 13 can help by pausing collections and allowing you to reorganize your finances, even if student loans aren’t forgiven.

5. More High-Income Earners Are Filing Bankruptcy

Historically, bankruptcy was seen as a last resort for the poor. That’s changing in 2025.

We’re seeing an increase in:

Teachers, nurses, and government employees
IT professionals with high rent and private school tuition
Gig workers with unpredictable income

Bankruptcy isn’t about failure—it’s a strategic financial tool. And increasingly, middle- and upper-middle-class New Yorkers are using it to reset.

6. DIY Bankruptcy Tools Are Failing More Often

With more people turning to online AI-powered filing services, we’re seeing a sharp uptick in botched pro se bankruptcies.

Problems include:

Cases dismissed for incomplete forms
Clients losing property they could’ve protected
Chapter 13 plans that fail within months

Bankruptcy law is too complex—and too high-stakes—for AI tools to handle on their own. The cost of hiring an attorney is almost always lower than fixing a bad filing.

Key Takeaways for 2025

Bankruptcy filings are rising—especially in Brooklyn, Queens, and the Bronx.
High rent, credit card debt, and student loans are pushing even stable households to file.
Chapter 7 and Chapter 13 remain powerful tools to stop garnishments, foreclosures, and debt spirals.
The earlier you get legal advice, the better your outcome.

If your financial life feels out of control, this year might be the one to reset—and bankruptcy could be part of that strategy.

If you’re considering bankruptcy or simply want to understand your options, we’re here for you. Call or text us at 212-244-2882, email us at info@midtownbankruptcy.com, or visit www.midtownbankruptcy.com to get started. At The Law Office of William Waldner, P.C., we’ve helped countless New Yorkers take control of their financial future — and we’re ready to help you, too.