Tariffs and the broader cost of living crisis are pushing more Americans toward financial breaking point, a new survey has found.
What To Know
According to a new poll by financial services company JG Wentworth, conducted in February 2026 and surveying 1,421 U.S. adults, almost half of all personal bankruptcies are due to the cost of living and tariff costs. When asked what contributed most to their bankruptcy, 43.4 percent of respondents cited the cost of living crisis, making it the most common factor. Increased tariffs followed closely, mentioned by 41.7 percent.
Other factors were cited far less frequently as contributors to bankruptcy, including mortgage and interest rate increases (0.3 percent each), poor financial planning (0.3 percent), the death of a loved one (0.2 percent), and unexpected expenses (0.2 percent).
Non-business bankruptcy filings rose by 10.8 percent between September 2024 and September 2025, reflecting mounting pressure on American households, according to the firm. In 2025, total bankruptcy filings rose 11 percent, with increases in both business and non-business bankruptcies, the United States Courts announced in February. There were 549,577 personal bankruptcies last year.
Among respondents who reported filing for bankruptcy, the timing was nearly evenly split. Around 45.8 percent said they filed three to five years ago, while 45.2 percent said they filed six to 10 years ago.
Limited Financial Buffers
The survey also sheds light on how limited many households’ financial buffers are. When asked how long they could cover expenses if their income suddenly stopped, 40.8 percent said they could manage for just three months. On average, respondents said it would take $6,356.55 in additional debt to push them to the brink of bankruptcy.
Lasting Impact of Bankruptcy
The survey also examined how people recover after filing. Nearly nine in 10 respondents (89.3 percent) said they were able to rebuild financially, although this often took up to five years.
At the same time, many reported ongoing effects. According to the findings, 97.8 percent said they are still feeling the impact of their bankruptcy, regardless of when they filed or whether they have recovered financially. Nearly three quarters (73.7 percent) said bankruptcy continues to affect their ability to obtain loans or credit, while 73.3 percent said their credit score remains impacted.
Among those who had not fully rebuilt their finances, 88.4 percent pointed to high living costs and rising expenses as the main reason. This was followed by ongoing low income or unemployment (85.8 percent) and continued medical expenses or health issues (82.5 percent).
In addition to financial challenges, respondents described the emotional strain associated with bankruptcy. Participants said filing was more stressful than having a baby (35.5 percent) or buying a first home (36.6 percent).
Even after recovery, 8 percent said they are still feeling the effects of their bankruptcy, regardless of how long ago they filed.
Trump Tariffs
While the survey covers those who filed prior to the current Trump administration, recent tariff policy is widely believed to have pushed up costs for households.
Tariffs are taxes on imported goods, paid by businesses bringing products into the country. These costs are often passed on to consumers through higher prices, affecting everyday goods as well as domestically produced items that rely on imported materials.
Almost a year ago, in April 2025, President Donald Trump introduced sweeping reciprocal tariffs by invoking the International Emergency Economic Powers Act, including a universal 10 percent tariff and even higher rates on some trading partners. By February 2026, the Supreme Court ruled most of those emergency tariffs unconstitutional, beginning a process of issuing refunds to affected importers.
During the period those measures were in effect, American families paid an estimated average of about $1,745 in tariff-related costs between February 2025 and January 2026, according to Legal Clarity.
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