The Storm Is Building: What Rising Foreclosures and Bankruptcies Mean for Your Credit Union
and Lost Leverage

If you’ve been watching the economic headlines lately, you’ve probably noticed some unsettling trends. Foreclosure filings are climbing. Bankruptcy filings are climbing faster. And with inflation still squeezing household budgets and energy prices on the rise, there’s a real possibility that things get worse before they get better. As your credit union’s trusted legal resource, we want to make sure you’re seeing what we’re seeing — and that you’re ready for what may be coming.

The Numbers Don’t Lie

Let’s start with foreclosures. According to ATTOM’s most recent data, there were 42,430 properties nationwide with foreclosure filings in April 2026 alone — an 18% increase compared to April 2025. Zoom out a bit further, and the first quarter of 2026 shows 118,727 properties with foreclosure filings, up 26% year over year. Completed foreclosures — homes actually taken back by lenders — surged 42% annually in April. These aren’t rounding errors. This is a clear and consistent upward trend.

On the bankruptcy side, the U.S. Courts reported that total bankruptcy filings hit 574,314 in the twelve months ending December 2025, an 11% jump from the prior year. Both business filings and personal (non-business) filings increased, with personal bankruptcies — the kind your members are most likely to file — rising 11.2% to nearly 550,000 cases.

Why It Could Get Worse

Here’s what makes us more concerned: these numbers reflect conditions before the full impact of recent economic headwinds. Inflation has kept household budgets stretched thin, and rising oil and gas prices are adding pressure on top of that — both directly (at the pump and on utility bills) and indirectly (as higher energy costs ripple through the prices of groceries, goods, and services). When people are choosing between filling the gas tank and making a loan payment, the loan often loses.

We expect these economic pressures to continue driving both foreclosure and bankruptcy numbers higher in the months ahead. Credit unions — which tend to be deeply embedded in the communities they serve — will feel this directly in their collection pipelines, loss-mitigation queues, and member relationships.

What This Means for Your Credit Union

This is a moment that rewards preparation. Here’s what we’d encourage you to think about right now:

Review your collections policies and procedures. When was the last time your collections playbook got a serious look? Regulations change, best practices evolve, and what worked three years ago may expose you to compliance risk today — especially as litigation over improper collection practices remains active.

Audit your foreclosure processes. From the notice requirements to timelines to post-foreclosure handling, there are many moving pieces in a foreclosure — and several places where errors can lead to liability or losses. If your team hasn’t walked through that process recently, now is a good time.

Invest in training. Your frontline collections staff, loan officers, and management teams are going to encounter more distressed members in the coming months. Are they equipped to handle those conversations correctly — legally, operationally, and in a way that reflects your credit union’s values? Training now is far less costly than litigation later.

We’re Here to Help

We work with credit unions every day on exactly these issues — from reviewing policies and procedures to providing practical training for collections teams and loan officers. If you’d like a fresh set of eyes on your processes, or if you want to get your team up to speed on what to expect (and how to handle it) as bankruptcies and foreclosures increase, we’d love to talk.

Don’t wait for the storm to arrive. Reach out to us today, and let’s make sure your credit union is ready.

Jim Sorenson |Sorenson Van Leuven, PLLC |  |jim@svllaw.com

This blog post is for informational purposes only and does not constitute legal advice. For guidance specific to your credit union’s situation, please contact us directly.