Why Closures Are Outpacing Bankruptcies – And What It Means For Collections Recovery
If you follow the headlines, it would be easy to assume we are in the middle of a major bankruptcy wave, and to some extent, that’s true. Bankruptcy filings have been rising steadily over the past two years, with total filings up more than 10% year over year and business filings also increasing. But that doesn’t tell the full story. In reality, there’s something more interesting at work. A quiet shift is underway, with many companies choosing to walk away rather than declare bankruptcy. Of course that doesn’t make the headlines, but for those involved in collections recovery, it has major implications. Closures are Outpacing Bankruptcies Looking at the economic landscape as a whole, there’s no doubt that formal insolvency filings are worryingly high. According to the U.S. Courts’ Administrative Office, business filings rose 7.1 percent , from 23,107 to 24,737 in 2025. And business closures are happening at an alarming rate. Retail alone has seen thousands of store closures, with...
