Key Findings:
- Georgia saw the highest YoY growth in bankruptcies among large states, with a 184% increase — rising from 213 to 605 business closures in just one year.
- Wyoming had the fastest-growing bankruptcy rate in the U.S., increasing by 366.7% — from just 3 to 14 bankruptcies. While the number is small, the percentage jump is a major red flag for such a small business base.
- Delaware has the highest bankruptcy rate in the country at 1,796.3 per 100,000 businesses, largely due to its status as a corporate registration hub. Even with strong GDP growth, it saw 1,236 bankruptcies in 2024.
Business bankruptcies are rising again. In some states, the risk is much higher than in others.
In 2024, over 8,400 U.S. businesses filed for bankruptcy — that’s a 2.3% increase from the year before. But in a few states, the numbers are rising much faster. Even in places with growing economies, businesses are still shutting down.
DesignRush analyzed all 50 U.S. states and ranked them based on:
- How many businesses went bankrupt
- How fast that number grew
- How much the state’s economy (GDP) grew
If your business is in one of these high-risk states, you could be facing a greater chance of closing shop — local trends matter, and in these areas, the warning signs are hard to ignore.
States Most at Risk of Business Closures
1. Georgia
- Bankruptcies in 2024: 605
- Rate per 100,000 businesses: 97.9
- YoY growth: 184%
- GDP growth: 4.7%
Georgia had the biggest jump in bankruptcies of any U.S. state. In 2023, just 213 businesses filed. In 2024, it was 605.
That’s almost three times more in a single year.
Even large brands like Forever 21 closed stores in Georgia. If big companies are struggling, small ones are likely having an even harder time. This makes Georgia the #1 riskiest state for businesses in 2025.
2. Delaware
- Bankruptcies in 2024: 1,236
- Rate per 100,000 businesses: 1,796.3 (highest in the U.S.)
- YoY growth: 38%
- GDP growth: 6.4%
Delaware has the highest bankruptcy rate in the country. Many companies register here for tax reasons, even if they don’t do business in the state.
A large increase in bankruptcies shows that even registered companies are going under. This is a sign that many businesses are struggling, even with strong economic growth.
3. New Jersey
- Bankruptcies in 2024: 498
- Rate per 100,000 businesses: 97.9
- YoY decline: 49%
- GDP growth: 5.1%
New Jersey’s bankruptcy numbers halved.
However, the number of bankruptcies per business remains very high. This tells us that some companies are recovering, but many are still in trouble, especially in retail and small services. It’s a mixed picture — and still risky.
4. New York
- Bankruptcies in 2024: 876
- Rate per 100,000 businesses: 87.4
- YoY decline: 5.8%
- GDP growth: 4.7%
New York saw a small drop in bankruptcies, but the total is still high.
Many small businesses — like restaurants, stores, and service providers — are struggling. Even though New York’s economy is growing, it’s not growing fast enough to stop closures in many industries.
5. Texas
- Bankruptcies in 2024: 1,366
- Rate per 100,000 businesses: 86.7
- YoY decline: 24%
- GDP growth: 4.9%
Texas had one of the highest total bankruptcy counts in the country, even though the numbers dropped a bit from 2023.
Big companies like Neiman Marcus, J.C. Penney, and Instant Brands have all gone bankrupt in recent years — and many smaller businesses are feeling the same pressure.
The risk is still high, especially for local companies with tight budgets.
6. Wyoming
- Bankruptcies in 2024: 14
- Rate per 100,000 businesses: 27.5
- YoY growth: 367% (biggest increase in the U.S.)
- GDP growth: 1.3%
Wyoming had the fastest rise in bankruptcies in the whole country.
In 2023, there were only 3. In 2024, there were 14. That’s a 367% increase. This may not sound like a big number, but Wyoming has a small business base — so every closure has a big impact.
Even worse, Wyoming’s economy isn’t growing fast, and retail growth is very weak. In fact, DesignRush previously reported that Wyoming ranks last in the U.S. for retail growth, even though the state has money in reserves. This hints small businesses struggle to survive in 2025.
4 Tips to Grow Your Business Despite Economic Volatility
Bankruptcy filings are climbing quickly, which means more businesses are running into serious trouble.
Even large, well-known companies are shutting down, and that puts added pressure on smaller businesses in the area. Retail stores and local service providers are also feeling the squeeze as costs rise and customer spending slows.
To stay ahead, it’s important to act now:
- Start by closely tracking your cash flow so you always know where your money is going
- Cut back on any extra costs that aren’t essential to running your business
- Try to build up a backup fund — even a small one can help you get through slow months
- Stay flexible with how you sell your products or services, so you can quickly adjust to changes in demand
Planning today can help your business stay strong tomorrow.
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