The Current State of Bankruptcy in 2025: What You Need to Know
- McMann, P.A.
- Feb 22
- 2 min read
Updated: Apr 6
As we move through 2025, bankruptcy filings remain a crucial financial tool for individuals and businesses facing overwhelming debt. With inflation fluctuations, interest rate changes, and evolving economic policies, understanding the current bankruptcy landscape is more important than ever. If you are considering filing for bankruptcy in Lakeland, Tampa, Orlando, or anywhere in Central Florida, here’s what you need to know.
Bankruptcy Trends in 2025
Bankruptcy filings have seen shifts due to economic changes. Some key trends include:
Increase in Chapter 13 Filings: More individuals are turning to Chapter 13 bankruptcy, which allows for debt restructuring instead of liquidation. This is partly due to rising foreclosure rates and homeowners seeking to protect their properties.
Fluctuating Chapter 7 Filings: Chapter 7 bankruptcy remains the most common form of personal bankruptcy, but changes in disposable income thresholds are affecting eligibility.
Small Business Bankruptcies on the Rise: With economic uncertainty, small businesses are increasingly utilizing Chapter 11 bankruptcy to restructure their debts and remain operational.
How the New Trump Administration Policies May Impact Bankruptcy
With the return of the Trump administration in 2025, several key policies could directly affect bankruptcy filings:
Changes to Consumer Debt Relief Programs – If federal relief programs are cut back or adjusted, individuals may find themselves with fewer options outside of bankruptcy.
Interest Rate Policies – Higher interest rates could increase monthly payments on credit cards, mortgages, and auto loans, pushing more people toward bankruptcy.
Tax Policy Adjustments – Potential tax cuts or changes in deductions may affect disposable income, impacting who qualifies for bankruptcy under the means test.
Regulation of Debt Collection Practices – Any loosening of consumer protection laws could make it more challenging for debtors to negotiate settlements outside of bankruptcy.
Recent Legislative Changes Affecting Bankruptcy
Several legal changes in 2024 and 2025 are shaping the bankruptcy landscape:
Bankruptcy Threshold Adjustments – New income caps for Chapter 7 eligibility mean more individuals may be forced into Chapter 13 repayment plans.
Student Loan Discharge Modifications – Some courts are making it slightly easier to discharge student loan debt in bankruptcy, but strict criteria still apply.
Foreclosure Prevention Measures – State and federal initiatives to delay foreclosures could impact bankruptcy filings, particularly in Chapter 13 cases.
Should You File for Bankruptcy?
Many people wait too long to consider bankruptcy, hoping their financial situation will improve. If you are experiencing any of the following, it may be time to consult a bankruptcy attorney:
✔️ Wage garnishments or lawsuits from creditors ✔️ Foreclosure notices or threats of repossession ✔️ Overwhelming credit card or medical debt ✔️ Using credit cards for everyday necessities due to lack of funds ✔️ Collection calls and legal threats from creditors
Consult a Trusted Bankruptcy Attorney in Central Florida
If you are struggling with debt and wondering if bankruptcy is the right option for you, contact a knowledgeable attorney today. At McMann, P.A., we help individuals and businesses navigate the bankruptcy process and explore all available debt relief solutions. Whether you are considering Chapter 7, Chapter 13, or business bankruptcy, we can provide the guidance you need.
Mark D. McMann
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