Bankruptcies Hit New Record In 2025 As Inflation + Tariff Cocktail Smoke Balance Sheets…

T*ts up…

2025 may’ve been a rough year for some, but for corporate America… it was even worse as it just unlocked a very ugly achievement badge. At least 717 U.S. companies filed for bankruptcy in 2025, the most since the Great Recession. Meaning, the only ones ordering bottle service on repeat this year were the lawyers putting it all together, because of course.

(Source: Giphy) 

In short, according to  S&P Global Market Intelligence, bankruptcies jumped 14% YoY, spanning both Chapter 11 “we’ll fix it, promise” filings and Chapter 7 “turn the lights off and auction the desks” situations. More specifically, pour one out for Rite Aid, 23andMe, Hooters, and Spirit Airlines, all of whom managed to speedrun corporate self-destruction in very different, yet equally impressive ways. Genetic testing, chicken wings, and air travel… all quote on quote pillars of modern civilization becoming 2025s biggest losers. And yet, what’s different this time is who is getting smoked.

For the past few years, bankruptcy court was basically a mall directory: apparel brands, DTC nonsense, and zombie retailers that should’ve died during COVID but somehow hung on thanks to zero rates and stimmies. Not anymore. Now it’s industrials getting fed into the wood chipper. Manufacturers, construction firms, transportation companies… a.k.a., the unsexy backbone stuff… are leading filings in 2025. The reason? Well a few. The receipts come from inflation which ate at margins, high interest rates curb stomping balance sheets, and tariffs giving the not so happy ending of the decade. 

(Source: New York Post) 

Case in point: Import-heavy companies are getting squeezed from both ends. They can’t fully pass costs onto customers without killing demand, but they also can’t eat the costs without bleeding out. So they do what corporations do best when cornered: file paperwork and pray. Meanwhile, consumers are quietly tapping out as discretionary spending got vaporized. People are still buying groceries and paying rent, but home décor, fashion, and “treat yourself” nonsense is dead. 

Additionally, renewable energy firms got hit especially bad. Solar installers and equipment suppliers are getting crushed by a brutal combo of reduced incentives and suddenly massive import duties. Some solar panels went from sub-5% tariffs to ~20% overnight. Translation: Bodies on the floor. Elsewhere, transportation didn’t fare much better. Electric truck maker Nikola filed Chapter 11 after failing to scale, eating recall costs, and getting slapped with a nine-figure SEC penalty for seasoning. Spirit Airlines managed to file again, which should honestly come with a punch card. Private jet firms weren’t spared either… turns out rich people also notice interest rates. 

(Source: Giphy) 

And just to top it all off, we have the mega bankruptcies. Cornerstone Research counted 17 filings involving companies with $1B+ in assets in just the first half of 2025… the highest six-month total since COVID. Bodies on the floor, amirite? The moral here is that tight credit is the ultimate guillotine. At the beginning of the year, the free money era didn’t just end… it went to get milk and never came back. Companies that survived on refinancing, covenant-lite debt, and vibes suddenly had to operate like actual businesses. Many could not. Some firms are deliberately holding prices down just to keep customers, even if it means lighting cash on fire in the meantime. Others are folding outright. As one academic put it: those with pricing power will pass costs on eventually. Everyone else gets a court date.

So yeah, for 2025 the new record reads 717 bankruptcies. And the scary part is that this wave wasn’t induced by a recession… instead it was from normalization.  Rates back to reality. Credit with consequences. Consumers acting broke because, shockingly, many of them are. If this is what “soft landing” looks like, a lot more companies are about to find out how hard the ground actually is. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.