More Californians are filing for bankruptcy, yet this signal of bill-paying problems looks middle-of-the-pack on a national scale.
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My trusty spreadsheet examined SmartAsset’s state-by-state analysis of personal bankruptcy filings, comparing the 12 months ending in March 2026 with the previous year in order to identify where financial stress is concentrated.
These stats show California filings rose 15% in the year, the 15th largest increase among the states and faster than the nation’s 12% pace. Slowing economic growth, rising inflation and lofty interest rates hammered many household budgets, but not at a common clip across the nation.
The states with the biggest jumps in bankruptcy were North Dakota (up 41%), Alaska (up 29%), Florida (up 22%), Texas (up 20%), and Oregon (up 19%).
Only one state had fewer bankruptcies: Maine, down 8%.
The smallest increases were in New Hampshire (up 1%), Hawaii (up 2%), Wisconsin (up 3%), and Illinois (up 4%).
Now, when it comes to the number of filings, it’s not surprising that larger states have more bankruptcies.
California’s 52,973 filings in the year ranked first. That was 9% of the nation’s 559,396 bankruptcies.
Florida was No. 2 at 44,496, then Texas at 35,573, Georgia at 31,677 and Illinois at 26,525.
Relatively speaking
To better understand where major financial problems are brewing, consider filing counts relative to a state’s population.
By this math, California had 134 filings per 100,000 residents. That’s just the 28th largest rate and 19% below the nation’s 165-per-100,000 pace.
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Bankruptcies are most common in Alabama, with 405 filings for every 100,000 residents. Next came Mississippi at 332; Tennessee at 299; Nevada at 285; and Georgia at 283.
Where is it hardest to find bankruptcies? Alaska (32 per 100,000), Maine (38), Vermont (41), New Hampshire (64), and Massachusetts (68).
And peek at California’s economic rivals: Texas had 114 filings per 100,000, No. 31, while Florida had 190, the 15th highest.
Scoring the states
These bankruptcy patterns illustrate how credit scores help lenders predict who can repay their bills.
Ponder how a state’s average FICO credit scores from 2025 align with the aforementioned per-capita bankruptcy rankings.
You see three states with poor credit scores having frequent bankruptcies: Mississippi had the nation’s worst credit score, Alabama was third-lowest, and Georgia was fourth-lowest.
Conversely, two states among the highest credit scores experienced rare bankruptcies: Vermont had the nation’s second-highest credit scores, and New Hampshire ranked fourth-highest.
By the way, California’s average credit score ranked 21st among the states – in step with its No. 28 bankruptcy rate.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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