Bankruptcy attorneys across the country report a growing trend: more young adults are turning to bankruptcy as a way to manage overwhelming debt. In particular, individuals between the ages of 25 and 35 are making up a much larger share of filings than in previous years.
Rising Costs and Stagnant Wages
One of the primary drivers behind this shift is the widening gap between income and expenses. Many young adults entered the workforce during a period marked by economic instability, rising housing costs, and inflation. While everyday expenses have surged, wages have not kept pace, leaving many struggling to stay afloat financially.
Easy Access to Credit
Younger consumers today have unprecedented access to credit. Credit cards, personal loans, and “buy now, pay later” services make it easy to accumulate debt quickly. While these tools can provide short-term relief, they often lead to long-term financial strain when balances become unmanageable.
Post-Pandemic Financial Pressures
Bankruptcy filings have been increasing since their pandemic-era low in 2022. According to the American Bankruptcy Institute, more than 533,000 personal bankruptcy cases were filed in 2025. Of those, roughly 333,000 were Chapter 7 filings, which allow for the discharge of most unsecured debts, while just over 200,000 were Chapter 13 cases involving structured repayment plans.
Experts suggest this rise reflects the aftermath of pandemic-era financial conditions. Government stimulus and temporary relief programs helped many households in the short term, but were followed by higher costs of living and continued wage stagnation.
Debt Burdens Unique to Younger Filers
Young adults often face a unique combination of financial pressures. Many carry significant student loan debt, which is typically not dischargeable in bankruptcy. On top of that, young adults see huge increases in rent, healthcare costs, and everyday expenses. Gig work was once a popular way to supplement income, but in recent years, it has become less reliable and lucrative.
Impact of Online Gambling
Another emerging factor is the rise of online gambling. Attorneys report a noticeable increase in younger men who have accumulated substantial credit card debt through sports betting and online gaming platforms. In some cases, individuals have incurred tens of thousands of dollars in debt in a relatively short period.
The accessibility of betting apps, combined with social media-driven “fear of missing out,” has contributed to risky financial behavior. Although some major platforms have begun restricting credit card use, gambling remains a huge problem.
Contact Us Today
The rise in younger bankruptcy filers highlights broader economic challenges. As these pressures continue, bankruptcy may remain an increasingly common solution for young adults seeking a fresh financial start.
No matter your age, there are options to help make dealing with debt easier. Count on a bankruptcy attorney from The Law Offices of Adam M. Freiman to help you understand your legal options. Let us help you reduce your debt. Schedule a consultation with our office today by calling (410) 486-3500 or filling out the online form.
