Corporate Bankruptcies Surge to a 15-Year Peak

U.S. corporate bankruptcy filings jumped sharply in 2025 — hitting the highest levels since the aftermath of the Great Recession. At least 717 companies filed for Chapter 11 or Chapter 7 through November, representing a 14 % year-over-year increase.

This isn’t just mom-and-pop distress.

Debt-burdened industrials, consumer retailers, and even some larger firms are breaking under inflation, tariffs, and rising interest rates.

Why Filings Are Spiking

The surge in bankruptcies stems from a mix of macro pressures and policy impacts:

Inflation + higher interest rates are squeezing margins.

Trade policy and tariffs have ballooned costs for import-dependent manufacturers and transportation companies.

Consumer pullback is hitting discretionary retail segments.

In some sectors, “mega bankruptcies” — companies with >$1 billion in assets — also increased, underscoring the depth of stress.

Which Industries Are Most Affected

Bankruptcies in 2025 were especially concentrated in:

Industrials: Manufacturing, construction and transport names faced tariff-driven input costs.

Consumer Discretionary: Retailers selling non-essentials saw customer demand evaporate in the face of higher living costs.

Energy & Renewables: Solar and specialty energy firms cited policy changes and tariff headwinds.

Examples include Spirit Airlines and PosiGen’s filings.

Market Implications

A surge in bankruptcies can send shockwaves through financial markets:

Credit Stress Signals

When defaults rise, lenders tighten credit, which:

• Raises funding costs
• Compresses investment
• Pushes risk premiums wider

Financial names and credit-sensitive stocks often feel this first.

Tickers & Sectors to Watch via Unusual Whales

Trade markets react before fundamentals do — particularly via options flow.

Here are key areas to monitor:

Financial Sector Stress (Banks & Lenders)

• JPM — Major U.S. bank exposure to corporate credit trends.
• BAC — Bank of America’s lending and provision dynamics.

Industrial & Transport Risks

• GM / F — Automakers tied to supply chain and tariff cost pressures.
• UAL — Airlines often lead in bankruptcy cycles when travel demand softens + fuel costs rise.

Retail & Discretionary Retail Stress

• M / KSS — Retail names sensitive to consumer demand and pricing power.

Watch flow activity around these names as stress narratives intensify.

Options Flow Patterns to Watch

Markets often flash risk via options before equities price moves:

1. Rising Put Skew
Growing demand for puts over calls signals fear in a sector — watch financials and industrials.

2. Implied Volatility Expansion
Vol spikes often accompany credit stress headlines — especially in banks and cyclical names.

3. Unusual Activity in Sector Baskets
Unusual flow in ETFs like XLF (financials) and XLI (industrials) can show where traders are hedging.

Use Unusual Whales tools to track these patterns in real time.

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Bottom Line for Traders

A jump in bankruptcy filings often serves as a canary in the credit coal mine.

That means:

• Higher risk premiums in credit-linked names
• Volatility rising before price trends
• Sector rotation toward defensive exposures

Options flow and GEX profiles often signal these shifts early.

Watch those metrics closely as economic pressures evolve.

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Track credit stress signals in options flow, monitor volatility changes, and spot unusual activity before markets move.

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