Personal bankruptcy filings in California rose 15% in the 12 months ending in March 2026, outpacing the national increase of 12% and reflecting the growing financial strain on the state’s households from slowing economic growth, rising inflation, and elevated interest rates.
California recorded 52,973 personal bankruptcy filings during the period — the most of any state, accounting for 9% of the nation’s 559,396 total filings. Texas saw a 20% increase, while Florida experienced a 22% jump. North Dakota led all states with a 41% rise.
However, California’s bankruptcy rate relative to population tells a more moderate story. The state recorded 134 filings per 100,000 residents, ranking 28th nationally and falling 19% below the national pace of 165 per 100,000. By comparison, Alabama led with 405 filings per 100,000 residents.
The data, compiled by SmartAsset from federal court records, illustrates the uneven distribution of financial stress across the country. States with the highest per-capita bankruptcy rates — Alabama, Mississippi, Tennessee, Nevada, and Georgia — tend to have lower average credit scores, while states with the lowest rates, such as Alaska and Vermont, rank among the highest in creditworthiness.
California’s average credit score ranked 21st among the states, consistent with its 28th-place bankruptcy rate. The state’s large population and high cost of living, particularly in housing, contribute to the elevated raw number of filings even as the per-capita rate remains middle of the pack.
Economists note that the bankruptcy trends reflect broader economic pressures. Rising interest rates have increased borrowing costs for consumers with credit card debt and adjustable-rate mortgages, while inflation has eroded purchasing power. Southern California has seen some relief, with rents declining in 63% of the region, according to recent data.
Only one state, Maine, recorded fewer bankruptcies than the prior year, with an 8% decline. The smallest increases were in New Hampshire, Hawaii, and Wisconsin.
