A new analysis of U.S. bankruptcy court data shows a sharp nationwide increase in personal bankruptcies, a trend that Democratic lawmakers say is being driven in part by former President Donald Trump’s economic policies — particularly tariffs and health care cuts.

According to a report released by Representative Brendan Boyle of Pennsylvania, the ranking member of the House Budget Committee, personal bankruptcy filings rose 11 percent year-over-year in 2025, totaling roughly 55,000 more cases than in 2024. The increase pushed the number of Americans filing for bankruptcy past half a million, marking the highest level since 2019 — the final year of Trump’s previous presidency.

The data, drawn from U.S. bankruptcy courts nationwide, suggests growing financial distress among American households, even before the full impact of recently enacted policy changes is felt.

Health Care Costs a Major Driver

Representative Boyle says that while multiple factors are contributing to the surge, high medical costs remain one of the primary drivers of personal bankruptcy in the United States.

Importantly, the report reflects conditions from last year — before a new wave of health care reductions took effect in 2025. Those changes include cuts to Affordable Care Act provisions that began on January 1, as well as forthcoming Medicaid reductions that are expected to remove up to 10 million Americans from coverage later this year.

Boyle warns that the current data may only be a preview of what lies ahead.

“It’s alarming that we’re already seeing such a spike in bankruptcies,” he said. “But what’s even more concerning is that this could be foreshadowing a much larger increase in 2026.”

Household Costs Continue to Climb

The report highlights rising household expenses that are compounding financial pressure on working Americans. In 2025 alone, the average household spent an additional $1,625 compared with the previous year.

Separate analysis from the Joint Economic Committee breaks down those increases further:

• $323 more in housing costs

• $310 more for groceries

• $241 more in transportation expenses

While each category may appear manageable in isolation, Boyle argues that together they represent a serious strain on household budgets — particularly for families living paycheck to paycheck.

Trump and Republican leaders made lowering costs a central campaign message in the last presidential election, especially in swing states such as Pennsylvania, which Trump carried by just over one percentage point. Boyle says the reality one year later tells a very different story.

“Costs were the number one reason he won Pennsylvania,” Boyle said. “He promised to lower them. Instead, they’re higher than ever — and directly tied to his policies.”

Why Bankruptcies Matter as an Economic Signal

While bankruptcies are not the only measure of economic distress, Boyle says they are one of the most telling.

Many Americans struggling financially never formally file for bankruptcy due to lack of knowledge, access, or legal resources. But those who do file, he argues, are often already at rock bottom.

“If you’re declaring bankruptcy, that’s it — you’re at the end of the line,” Boyle said. “Historically, bankruptcies have been a leading indicator of broader economic trouble.”

Other warning signs are emerging as well. Over the past three months, the U.S. economy has seen more jobs lost than gained, and Boyle expects further negative employment data in upcoming reports.

Tariffs and Congressional Power Struggles

Beyond health care and inflation, Boyle points to Trump’s on-again, off-again tariff policies as another source of economic instability. He argues that unpredictable tariff declarations — including proposals as high as 145 percent on certain countries — raise costs for consumers and businesses alike.

At the same time, House Republicans are moving to limit Congress’s ability to challenge those tariffs. Under existing law, Congress must vote within 15 days when a president invokes emergency powers to impose tariffs. Boyle says Speaker Mike Johnson is attempting to reinterpret House rules to delay or prevent such votes altogether.

Critics argue the maneuver effectively strips Congress of its constitutional role as a co-equal branch of government, leaving it unable to rein in executive power over trade policy.

According to Boyle, the fact that House leadership has struggled to secure enough votes to pass the rule underscores internal Republican divisions. Only a small number of GOP lawmakers have publicly opposed the effort, but their resistance has been enough to delay the vote.

A Broader Crisis of Governance

Boyle contends that the bankruptcy surge, rising costs, health care cuts, and tariff battles all point to a deeper problem.

“Republicans stopped governing a long time ago,” he said. “Politics became the game, not service.”

He argues that fear of retaliation from Trump — particularly public criticism or social media attacks — now shapes much of Republican behavior in Congress, often at the expense of economic stability and legislative oversight.

As bankruptcy filings rise and household costs continue to climb, Boyle says the data paints a clear picture of mounting financial distress — and raises urgent questions about the direction of U.S. economic policy in the years ahead.