By Naveen Athrappully

A total of 54,028 bankruptcy filings were made in October, a 2 percent jump from a year ago, according to the American Bankruptcy Institute (ABI).

The figure includes filings made by both individuals and businesses. Bankruptcy filings by individuals rose 2 percent year over year, while business filings fell 4 percent, ABI said in a Nov. 6 statement.

“Elevated costs, tight credit conditions, and geopolitical risks continue to provide challenging economic headwinds for small businesses and families,” Amy Quackenboss, ABI executive director, said.

The 12-month inflation rate was 3.7 percent in September, the seventh straight month it has remained above 3 percent, according to data from the Bureau of Labor Statistics.

The inflation rate in September was up from 3.4 percent in August, and was significantly driven by high energy costs. The gasoline index jumped 9 percent, while the overall energy index rose 5.2 percent.

Small Business Bankruptcies

ABI said Subchapter V Chapter 11 filings, which represent filings by small businesses, jumped 24 percent.

Quackenboss said that the Bankruptcy Threshold Adjustment Act will help more small businesses and households to tackle challenges such as elevated costs and geopolitical risks.

The Act seeks to permanently raise the debt threshold for small business Chapter 11 bankruptcy to $7.5 million. This limit is the maximum debt a small business can have when applying for such bankruptcy. The bill also raises the debt limit of individuals filing for Chapter 13 bankruptcy.

The bill has been passed by both the House of Representatives and the Senate, and was sent to President Donald Trump for signing into law on Nov. 5.

Bankruptcy filing volumes are expected to keep rising into 2027, Michael Hunter, vice president of bankruptcy data provider Epiq AACER, said in the statement.

“While the broader economy continues to grow, household budgets remain strained by high energy prices and elevated interest rate borrowing costs,” Hunter said.

Major Bankruptcies, US Economic Situation

Character.AI, the popular platform that offered AI chatbot companions, was one of the major companies to file for bankruptcy in October.

The company filed for Chapter 11 bankruptcy, listing estimated assets and liabilities of $50 million to $100 million. CEO Colin M. Adams said in a court filing that the platform’s technology was expensive to operate.

Getty Images Holdings Inc., a leading provider of visual content, announced on Oct. 21 that it filed for Chapter 11 bankruptcy as part of a financial restructuring.

The U.S. economy has shown positive signs in October despite the higher number of bankruptcies.

The economy added 165,000 new jobs in October, according to Nov. 6 data from the Bureau of Labor Statistics. This far exceeded the consensus forecast for a 65,000 gain. The unemployment rate dropped to 4.1 percent from September, also below market estimates.

“Today’s jobs report, which blew past expectations and added 165,000 jobs, is proof that President Trump’s pro-growth economic agenda is working,” White House spokesman Matthew Middleton said in a statement.

“From almost 20 fair trade deals to trillions in manufacturing investments, this administration is putting America back on a path to prosperity. President Trump’s mission remains unchanged: lowering costs, creating jobs, boosting our economy, and putting American workers first.”

The U.S. economy has added 861,000 jobs through October this year, far more than the 116,000 created in all of last year.

Business activity was robust in October, continuing the trend from September, according to a Nov. 4 statement from S&P Global.

All seven sectors tracked by the company saw positive business activity—technology, financials, consumer goods, consumer services, basic materials, industrials, and healthcare.

The consumer goods and financial sectors grew more than in September. Other sectors also grew, but less than in September.