Honestly, the numbers coming out of July were enough to make any CFO sweat. According to data from S&P Global Market Intelligence, 71 US companies filed for bankruptcy in July 2025. That isn't just a dry statistic. It’s the highest single-month total we've seen since the world was basically falling apart in July 2020.
Think about that for a second. We’re four years removed from the peak of a global pandemic, yet the corporate "death toll" just hit a five-year high.
Why now? It’s tempting to blame a single thing, but the reality is way messier. You’ve got a "perfect storm" of high interest rates, sticky inflation, and some pretty intense shifts in trade policy that finally broke the back of dozens of major firms. By the end of July, the total count for 2025 had already hit 446 large company filings. We are officially on track to blow past last year's numbers.
The Big Names That Hit the Wall
It wasn't just small mom-and-pop shops throwing in the towel. We saw massive, billion-dollar "mega-bankruptcies" that shook up entire industries.
- LifeScan Global: A huge name in the medical device world.
- Del Monte Foods: Basically a staple in every American pantry.
- Genesis Healthcare: One of the biggest players in the nursing home space.
When companies with more than $1 billion in assets start filing for Chapter 11, it’s a sign that the "higher-for-longer" interest rate environment isn't just a talking point—it's a wrecking ball for anyone with a lot of debt.
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Why July Was Such a Disaster
You might be wondering why July specifically saw such a spike. Bankruptcies usually don't happen overnight. They’re the result of months, sometimes years, of struggling to make the math work.
Interest rates are the obvious villain here. Many of these companies loaded up on cheap debt back in 2021 or 2022. Now, those loans are coming due, or the interest payments are resetting at double or triple the original rate. If you're a manufacturer or a retailer already dealing with thin margins, that extra interest is basically a death sentence.
Then there’s the tariff situation. In 2025, new trade policies and tariffs started hitting the books. For industrial and manufacturing firms, this sent the cost of imported parts through the roof. If you can't pass those costs on to customers—who are already feeling broke because of inflation—you’re stuck. You've got no room left to breathe.
Industrials and Consumer Goods are Bleeding
If you look at where the 71 filings came from, two sectors stand out: Industrials and Consumer Discretionary.
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Industrial companies are getting hammered by those supply chain costs and the sheer expense of running heavy operations. On the consumer side, people just aren't spending like they used to. When a trip to the grocery store costs $200 for three bags of food, people stop buying the "extra" stuff. That hits retailers and consumer brands hard and fast.
Misconceptions: Is the Whole Economy Crashing?
It’s easy to see "71 bankruptcies in one month" and think we're heading for a 2008-style collapse. But there’s some nuance here that most people miss.
First off, a lot of these are Chapter 11 reorganizations, not liquidations. This means the company isn't necessarily disappearing; it’s just trying to clean up its balance sheet so it can keep the lights on. In fact, about 61% of filings in early 2025 were aimed at restructuring rather than just shutting down for good.
Also, some experts, like those at Epiq AACER, argue we're just seeing a "return to normal." During the pandemic, the government pumped so much money into the system that even "zombie" companies—firms that probably should have failed years ago—were able to survive on life support. Now that the free money is gone, we're seeing the natural cleanup that should have happened years ago.
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The Private Equity Factor
Another thing nobody talks about enough? Private equity. A lot of the companies that went under in July were backed by private equity firms. These firms often load companies up with massive amounts of debt to fund acquisitions. That strategy works great when interest rates are at 0%. When rates are at 5% or 6%? Not so much. These highly leveraged companies are the first ones to crack when the economy gets bumpy.
What This Means for You
So, what should you actually do with this information? Whether you're an investor or just someone trying to keep your job, there are a few takeaways.
- Watch the Debt: If you're looking at stocks, check the debt-to-equity ratio. Companies that are drowning in debt are the biggest risks right now.
- Industrial Stability: Be cautious with the industrial sector. With trade policies shifting constantly, those companies are facing unpredictable costs.
- The "Saks Global" Signal: Keep an eye on major retail mergers and filings. The recent move by Saks Global (the parent of Saks Fifth Avenue and Neiman Marcus) shows that even high-end luxury isn't safe from the need to restructure.
Actionable Steps to Protect Your Interests
If you're worried about how this trend might affect your business or investments, here is what you need to focus on:
- Audit Your Supply Chain: If you rely on industrial partners, make sure they aren't on shaky ground. A bankruptcy from a key supplier can halt your entire operation.
- Refinance Early: If you run a business with debt coming due in the next 12–18 months, don't wait. Markets are tight, and waiting until the last minute is how those 71 companies ended up in court.
- Focus on Cash Flow: In 2026, "cash is king" isn't just a cliché. It's a survival strategy. Prioritize liquidity over aggressive expansion until the bankruptcy wave starts to level off.
The reality is that July was a wake-up call. The era of cheap money is officially over, and the market is currently separating the healthy companies from the ones that were just getting by on luck and low interest rates. Stay sharp, watch the balance sheets, and don't get caught off guard by the next spike.