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Belisa Pang

Publication Date

3-15-2026

Abstract

The American consumer bankruptcy system is a costly regime with profound societal implications. Between 2008 and 2023, consumers filed 13.8 million bankruptcy cases across the ninety-four federal bankruptcy districts in the United States, generating over $4 billion in court filing fees alone. When accounting for attorney fees, trustee expenses, creditor costs, and broader economic externalities—such as increased interest rates borne by other consumers—the total financial impact easily reaches tens of billions, if not hundreds of billions, of dollars.

Against that backdrop, this study uncovers a startling phenomenon: nearly 46% of the consumers who filed bankruptcy in 2023 were repeat filers, defined as individuals with at least one prior bankruptcy record since 1997. This percentage has followed an overall upward trend, increasing at an average annual rate of 52 basis points since 2016.

There are significant geographic disparities in the prevalence of repeat bankruptcy filings. The U.S. District Court for the Western District of Tennessee has the highest percentage of repeat filers, with 76% of all filings coming from individuals with prior bankruptcy records. In contrast, the Southern District of West Virginia has the lowest percentage, with “only” 36% of filings attributed to repeat filers. Historically, repeat filing has been most common in the South, but by 2023, many jurisdictions outside the region—such as districts in Pennsylvania and Utah—also began to exhibit elevated rates of repeat filings.

These findings challenge foundational assumptions in bankruptcy scholarship and raise urgent policy questions about the system’s efficacy in delivering a true “fresh start” to debtors. At a minimum, this Article calls to revise the estimated number of people benefiting from the bankruptcy system and reevaluate policies designed to address the prevalence of bankruptcy in American society.

As the first comprehensive national study of bankruptcy recidivism that covers both Chapter 7 and Chapter 13 bankruptcy, this Article leverages credit report data and court records to reveal novel insights about repeat filers. Contrary to the prevailing narrative that serial filings are driven by bad faith debtors exploiting Chapter 13, the study finds that the majority of repeat filers had previously received a discharge, with nearly half initially filing under Chapter 7. Furthermore, most repeat filings occur after a significant gap—typically exceeding seven years—suggesting that these debtors are not engaging in short-term strategic abuse of the system but are instead grappling with persistent financial instability.

This study also demonstrates that prior bankruptcy filings are a robust predictor of future filings, even after controlling for financial and demographic factors. This means that individuals with a bankruptcy history are disproportionately likely to file again when faced with financial distress compared to those without such a history. As repeat filers account for a growing proportion of all bankruptcy filings, their heightened sensitivity to financial shocks must be considered when evaluating policy changes.

By shifting the focus from short-term Chapter 13 abuse to the broader structural patterns of repeat bankruptcy, this Article offers a novel framework for understanding the long-term dynamics of consumer bankruptcy. These findings can have profound implications for bankruptcy law, financial regulation, and social safety net policies, urging a reevaluation of how the system addresses the enduring financial vulnerabilities of debtors.

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