Consumer Bankruptcy Filings Are Rising in 2026: What South Carolina Families Need to Know

After several years of historically low bankruptcy filings following the COVID-19 pandemic, consumer bankruptcy cases are climbing once again across the United States. Through the first half of 2026, individual bankruptcy filings increased by approximately 12% nationwide, with both Chapter 7 and Chapter 13 filings experiencing significant growth. (abladvisor.com). During the Covid pandemic, most bankruptcy attorneys saw bankruptcy case filings dramatically decrease. Now we are seeing dramatic increases.

South Carolina is following this national trend. Bankruptcy courts serving Columbia, Greenville, Charleston, and the rest of South Carolina have reported increasing case filings throughout 2026, reflecting the financial pressure many families continue to face. (scb.uscourts.gov)

If you’re struggling with overwhelming debt, rising interest rates, medical bills, or wage garnishments, you’re not alone. Understanding your options now may help you regain control before financial problems become even more difficult to manage.

Why Are Bankruptcy Filings Increasing?

Several economic factors have contributed to the increase in consumer bankruptcies during 2026.

Higher Interest Rates

Although inflation has moderated compared to previous years, many consumers continue paying significantly higher interest rates on:

• Credit cards
• Personal loans
• Auto loans
• Home equity loans

Many credit cards now carry interest rates exceeding 20%, making it increasingly difficult for consumers to pay down balances. Minimum payments often barely cover interest, causing debt to linger for years.

Rising Cost of Living

Housing, insurance, utilities, groceries, and healthcare remain substantially more expensive than they were just a few years ago.

Even households with steady employment often find that their income simply doesn’t stretch as far as it once did.

Medical Debt

Unexpected medical expenses continue to be one of the leading causes of financial hardship.

Even insured patients frequently face thousands of dollars in deductibles, coinsurance, and out-of-network expenses that quickly become overwhelming.

End of Pandemic Savings

Many families relied on savings accumulated during the pandemic. Those reserves have now largely been exhausted, leaving consumers with fewer financial cushions when emergencies occur.

According to bankruptcy industry data, the first half of 2026 saw:

• Individual bankruptcies increase approximately 12%
• Chapter 7 filings increase approximately 15%
• Chapter 13 filings increase approximately 8% compared with the same period in 2025. (abladvisor.com)

South Carolina Bankruptcy Filings Are Also Increasing

The same financial pressures affecting the rest of the country are impacting South Carolina residents.

The United States Bankruptcy Court for the District of South Carolina has reported increasing filings throughout 2026 across its three divisions:

• Columbia
• Greenville
• Charleston

Monthly filing reports show hundreds of new bankruptcy cases being filed throughout the state, including substantial numbers of both Chapter 7 and Chapter 13 cases. (scb.uscourts.gov)

Whether you live in Columbia, Greenville, Charleston, or another South Carolina community, bankruptcy remains a federal legal process designed to help honest debtors obtain a financial fresh start.

Understanding Chapter 7 Bankruptcy

Chapter 7 bankruptcy is often called a “fresh start” bankruptcy.

Its primary purpose is to eliminate unsecured debt, including:

• Credit card debt
• Medical bills
• Personal loans
• Deficiency balances
• Certain judgments

Most Chapter 7 cases last approximately four to six months.

Many people are surprised to learn that they may keep:

• Their home
• Their vehicle
• Retirement accounts
• Household furnishings
• Personal belongings

depending upon South Carolina exemption laws and the specific facts of their case.

For individuals with primarily unsecured debt and limited disposable income, Chapter 7 may provide the fastest path toward financial recovery.

Understanding Chapter 13 Bankruptcy

Not everyone qualifies for Chapter 7.

For individuals with higher incomes or those seeking to protect valuable assets, Chapter 13 bankruptcy may be an excellent solution.

Chapter 13 involves a court-approved repayment plan lasting three to five years.

Common reasons people choose Chapter 13 include:

• Stopping foreclosure
• Catching up on mortgage payments
• Stopping vehicle repossession
• Paying overdue taxes
• Managing debt while protecting assets
• Consolidating unsecured debts into an affordable monthly payment

Many South Carolina homeowners have successfully used Chapter 13 to save their homes while regaining financial stability.

Common Warning Signs You May Need to Speak with a Bankruptcy Attorney

Many consumers wait far too long before consulting a bankruptcy attorney.

Warning signs include:

• Using one credit card to pay another
• Only making minimum payments
• Collection calls becoming constant
• Wage garnishments
• Lawsuits from creditors
• Utility shutoff notices
• Mortgage delinquency
• Vehicle repossession threats
• Retirement savings being used to pay everyday bills

Bankruptcy should generally be considered before retirement accounts are depleted or additional high-interest debt is accumulated.

Bankruptcy Is About Financial Recovery

Despite common misconceptions, bankruptcy laws exist to help people recover—not to punish them.

Congress created bankruptcy laws because financial hardship can happen to anyone.

Unexpected events such as:

• Job loss
• Divorce
• Illness
• Disability
• Business failure
• Economic downturns

can quickly overwhelm even financially responsible families.

Many successful professionals, business owners, healthcare workers, military veterans, and retirees have used bankruptcy to obtain a fresh financial start.

Does Filing Bankruptcy Ruin Your Credit Forever?

No.

One of the biggest myths surrounding bankruptcy is that credit is permanently destroyed. This is one of the most common questions I am asked as bankruptcy attorney by my clients. The good news, especially in Chapter 7, most of my clients are pleasantly surprised where their score is within twelve months of filing.

In reality, many people begin rebuilding their credit immediately after receiving a bankruptcy discharge.

Because debt-to-income ratios improve dramatically after bankruptcy, many individuals:

• Qualify for secured credit cards
• Obtain automobile financing
• Rebuild credit scores over time
• Eventually qualify for home mortgages

Every financial situation is different, but for many consumers, continuing to struggle under overwhelming debt causes more long-term credit damage than filing bankruptcy.

Choosing the Right Bankruptcy Attorney in South Carolina

Every bankruptcy case is unique.

Whether you’re considering Chapter 7 or Chapter 13, an experienced bankruptcy attorney can evaluate:

• Income
• Assets
• Debts
• Home equity
• Vehicle ownership
• Lawsuits
• Tax obligations
• Long-term financial goals

South Carolina bankruptcy cases are handled in federal bankruptcy court through divisions located in Columbia, Greenville, and Charleston, depending on where you live. (scb.uscourts.gov)

A knowledgeable attorney can explain your available options and determine which chapter best fits your circumstances.

The Bottom Line

The increase in bankruptcy filings during 2026 reflects the reality that many Americans continue to struggle with rising costs, high-interest debt, and economic uncertainty. Nationally, consumer bankruptcy filings are up by double digits, and South Carolina has experienced similar increases in new cases. (abladvisor.com)

If you’re finding it difficult to keep up with monthly payments, falling behind on your mortgage, or overwhelmed by credit card or medical debt, waiting rarely improves the situation.

Speaking with an experienced South Carolina bankruptcy attorney can help you understand whether Chapter 7 or Chapter 13 offers the best path toward financial recovery.

For residents of Columbia, Greenville, Charleston, and communities throughout South Carolina, bankruptcy remains one of the most effective legal tools for obtaining a genuine financial fresh start. If you would like to learn more about your bankruptcy options, feel free to call the Stone Law Firm for a consult