In New Orleans, bankruptcy lawyers say the worst move you can make with mounting debt is doing nothing until it is too late. With higher borrowing costs, storm-driven insurance hikes and tighter credit all squeezing households and small businesses, local attorneys are urging people to sit down with a professional early, when there is still room to maneuver and costs can be contained.
Louisiana’s three federal bankruptcy districts logged more than 10,000 total filings in 2025, an 8.5% increase from 2024, and commercial Chapter 11 cases rose sharply over the same period, according to local practitioners. “Bankruptcy is not a bad word,” said Jenny Abshier of Big Easy Law Group in New Orleans, who is pressing clients to seek help before problems snowball. Recent local examples include the Chapter 11 case for PosiGen and filings by Crosby Enterprises, which lawyers have described as restructuring efforts aimed at keeping operations running while debt is reorganized. Those trends were outlined by New Orleans CityBusiness, while coverage of PosiGen’s case was detailed by pv magazine USA.
Why filings are rising
Nationwide, total bankruptcy filings climbed 11% to 574,314 in the 12 months ending Dec. 31, 2025, with roughly 24,737 business cases and about 549,577 individual filings. The federal judiciary reports that filings have increased each quarter since mid-2022, although overall numbers still sit below earlier peaks, and it notes important differences between consumer cases under Chapters 7 and 13 and business reorganizations under Chapter 11. These figures come from the Administrative Office of the U.S. Courts.
Early 2026 is showing even more strain on the business side. Epiq AACER reported that commercial Chapter 11 filings jumped 76% in January and 67% in February on a year-over-year basis, signaling that larger companies are feeling the pinch as well, according to Epiq AACER.
How local lawyers are responding
New Orleans practitioners say a rough mix of higher interest rates, maturing debt and sector-specific pressures is sending more residents and business owners through their doors. "The single most critical piece of advice is to seek advice early and often," said Ben Kadden of Lugenbuhl, adding that clients who wait until the last minute often discover that the best tools have already slipped away.
Brad Knapp of Troutman Pepper agreed, warning that delaying a hard conversation with counsel can wipe out options like a value-preserving sale or an orderly recapitalization. Both lawyers told New Orleans CityBusiness that coming in while there is still some liquidity on hand usually produces a wider, and less painful, set of choices.
Options and steps
Local attorneys suggest a straightforward checklist for anyone feeling the squeeze: make a clear inventory of debts and cash flow, flag looming loan maturities or insurance exposures, talk with lenders about realistic terms and sit down with a bankruptcy lawyer to run a quick solvency analysis. That early homework, they say, can tell you whether you are dealing with a temporary cash crunch or a deeper structural problem.
The federal system offers different paths depending on the situation, including Chapter 7 liquidations, Chapter 13 repayment plans for individuals and Chapter 11 reorganizations for businesses. Getting onto the right track early can cut down on court time and professional fees, according to the Administrative Office of the U.S. Courts.
For New Orleans households and small businesses already feeling the pressure, lawyers say the takeaway is blunt but hopeful: do not wait until the lights are about to go off. Calm, early planning beats last-minute panic and, as filings continue to climb, offers the best odds of steering out of trouble with something left to rebuild.
