For some young adults crushed by heavy debt loads, bankruptcy has emerged as an escape hatch.
Two consumer bankruptcy attorneys told Business Insider they’ve seen a noticeable uptick in Gen Z and young millennial clients, ages of 25 and 35, in recent years — with one saying their share has increased severalfold.
The lawyers pointed to soaring living costs, lagging wages, and the ease of racking up credit card debt as key forces behind the trend. Factors like buy now, pay later loans and online betting are accelerating the rate at which some young people spiral into debt, they said.
“We’re definitely seeing more young filers, and it’s not because they’re irresponsible,” said Florida bankruptcy attorney Chad Van Horn. “It’s because they entered adulthood during one of the most financially distorted environments in decades.”
Personal bankruptcy filings in the United States have been on the rise since their COVID pandemic-era low in 2022. Still, they remain far short of the post-Great Recession peak in 2010, when cases topped about 1.5 million.
More than 533,000 individual bankruptcy cases were filed last year, according to the American Bankruptcy Institute, citing data from Epiq Bankruptcy Analytics.
Nearly 333,000 of those 2025 filings were Chapter 7 cases — the most common form of personal bankruptcy — which can erase most unsecured debts, including credit card balances or medical bills.
Chapter 13 filings, which involve a repayment plan to pay down some or all debts, accounted for just over 200,000 cases.
“What we’re seeing is sort of the hangover from several years of government stimulus and all the various economic things that have driven up costs and expenses while keeping wages fairly flat,” said Ed Boltz, a North Carolina bankruptcy attorney.
High consumer debt for young filers
Although there’s no comprehensive, official data source tracking the ages of bankruptcy filers in the US, both Boltz and Van Horn said young adults are now showing up in greater numbers than before, pushing Van Horn’s firm to rethink how it markets to clients.
“It’s extremely surprising,” said Van Horn, adding that 30% to 35% of his firm’s roughly 4,000 clients last year were between the ages of 25 and 35. Historically, he said, that age group made up just 5% to 10% of the caseload.
The surge in younger clients has forced Van Horn’s law firm to change its marketing strategy, the attorney said.
“We need to be where the 25 to 35 year olds are because they’re not necessarily in the same place that the 55 year old is getting their information from,” said Van Horn.
As Business Insider has previously reported, a wave of recent TikTok videos shows young people championing bankruptcy as a way to wipe out massive amounts of debt. Some called bankruptcy the “best” decision they’ve ever made.
Boltz said his firm handled about 2,000 bankruptcy cases in 2025, with about 20% of clients in the 25 to 35 range. He noted that it’s unclear whether young adults now represent a larger share of filers overall or whether the increase reflects the broader rise in cases.
Even so, Boltz said his firm has seen the greatest growth in bankruptcy filings from young adults and seniors in recent years.
Young filers often carry significant student loan debt, which is generally not dischargeable in bankruptcy. They also face escalating housing and living costs that put more strain on their budgets, the attorneys said.
Ready access to credit cards, personal loans, and buy now, pay later programs has compounded the problem, making it easy for young people to rack up debt quickly, they said.
“That formula is just a bad formula for Gen Z,” said Van Horn, who explained that many once relied on gig work to close budget gaps. “But a lot of them are burning out, and that work isn’t paying what it used to.”
He said substantial consumer debt is a common factor among his younger clients. And for some, online sports betting has become a major contributor to that debt.
Gambling debts are also on the rise
Both Van Horn and Boltz told Business Insider that they’ve been seeing a growing number of young clients — men in particular — with tens of thousands of dollars in credit card debt accumulated through online gambling.
“The gambling is really the one that has in the last year, year and a half, really taken off,” Boltz said, adding, “We’ve started to see people with $20,000, $30,000, $40,000 of fairly rapid credit card that they’ve incurred” through online betting.
Van Horn said he’s increasingly seen younger people get “addicted to gambling,” a trend he believes is being amplified by a culture of FOMO or fear of missing out.
It’s the idea, he said, that “everybody’s making money, everybody’s having fun” and then “you get involved, and you lose all your money.”
Popular sports betting companies like DraftKings and FanDuel have recently stopped accepting credit card deposits for bets. DraftKings ended the practice in August, and FanDuel followed earlier this month.
The crypto-based prediction market Polymarket has allowed users to fund their accounts with credit cards since 2024.
“We are seeing a lot more where we have clients who are very young, mid 20s, early 30s, who overwhelmingly tend to be men, who have run up pretty massive credit card debts gambling,” said Boltz.
“The apps are explicitly designed to part you from your money.”
Are you a young person who has filed for bankruptcy or is considering filing for bankruptcy? Contact this reporter via email at [email protected].
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