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Bankruptcy is a federal debt relief program. There are 2 common types to choose from, Chapter 7 or Chapter 13. Chapter 7 is the most common type of bankruptcy people file and is what most people think of when they think of bankruptcy. Chapter 13 is a payment plan over 3-5 years based on your income.  

            While filings remain below the historic highs seen after the Great Recession, they have steadily climbed from the pandemic-era lows. This reflects a mix of rising household debt, persistent inflation, and the unwinding of the temporary COVID era financial supports. The resulting trend over the last few years is less like a crisis and more like a slow, structural recalibration of household finances.

            One notable development has been the meteoric rise in Chapter 13 filings over the last several years. Nationwide, these have increased from 120,002 in 2021 to 207,889 in 2025, an increase of approximately 73%. Locally in the Western District of NY, the increase has been a remarkable 97% - nearly double - from 422 in 2021 to 831 in 2025. Often called “wage earner” bankruptcies, Chapter 13 cases allow individuals and married couples with regular income to reorganize their debts and repay creditors over time. There are likely several factors behind this trend: higher interest rates that make refinancing or consolidation less viable, increased auto loan payments amounts (the average monthly payment for new cars is $748 and $532 for used cars), and a growing number of households trying to preserve assets such as homes or vehicles from foreclosure or repossession.

            Chapter 7 filings have also increased over the last several years. Nationwide, these have increased from 288,327 in 2021 to 356,724 in 2025, an increase of approximately 24%. Locally in the Western District of NY, the increase has been flat - less than 1% - from 1,610 in 2021 to 1,623 in 2025. Even as wage growth has improved, many households have struggled to keep pace with rising costs for housing, food, and transportation. Credit card balances reached record levels this year, and delinquency rates have ticked upward. For individuals with limited assets and mounting unsecured debt, Chapter 7 remains the most straightforward path to debt relief. 

            Either type of bankruptcy provides significant financial relief. The average Chapter 7 case does not result in any payment to creditors, known as “No Asset” case, while the Debtor retains all of their property. Even in a Chapter 13 payment plan, unsecured debts such as credit cards and personal loans are paid back pennies on the dollar without interest. And secured loans such as vehicles can be paid at a lower interest rate than many auto loans typically provide these days. Certain debts are not dischargeable in either Chapter 7 or 13 – student loans, domestic support obligations, most taxes and court fines.

            McConville Considine Cooman & Morin has the expertise to assist both debtors and creditors in all aspects of bankruptcy. We have decades of experience representing people and companies in bankruptcy court and can assist you with your financial issues. Whether you have debts that need to be addressed, or someone who owes you money and has filed for bankruptcy, we can help guide you through the bankruptcy process from start to finish. As a federally designated Debt Relief Agency, we assist people and companies with finding solutions to their debt problems, including, assisting them with the filing of petitions for relief under Title 11 of the United States Bankruptcy Code. 

If you have questions regarding bankruptcy, contact our bankruptcy attorneys, Mikal J.Krueger at mkruger@mccmlaw.com or 585-512-3546, Lucien A. Morin, II at lmorin@mccmlaw.com or 585-512- 3534 or Douglas J. Lustig at dlustig@mccmlaw.com or 585-546-2500.

This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.

About MCCM

McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979.  With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.

We represent a diverse range of clients located throughout New York State and New England.  They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts.  For more information, please contact us at 585.546.2500.