Utah business bankruptcies climbing fast, putting customers' money at risk

A closed sign in a store window (Matt Gephardt, KSL)

WEST VALLEY CITY — New numbers suggest more Utah businesses are struggling.

Nationwide, business bankruptcy filings jumped 11.4%, while in Utah, filings jumped nearly 27%, according to data shared with the KSL Investigators from LendingTree.

"It's certainly not great news," said LendingTree's Matt Schulz.

Schulz says higher interest rates, inflation and shrinking profit margins are squeezing businesses.

The good news for Utah, he says, is that the Beehive State still has one of the lower business bankruptcy filing rates. The bad news is those filings are climbing fast.

"Utah businesses are filing at a lower rate than most of the rest of the country, even if it is trending in a not-so-great direction," Schulz said.

Bankruptcy doesn't always mean a company is closing. Some reorganize and keep operating. But when a company folds, customers who paid upfront can become creditors, competing to recover their money.

As Get Gephardt has reported, after Bed Bath and Beyond filed for bankruptcy in 2024, people holding paid-for gift cards found them, suddenly, useless.

Businesses struggling financially can also be a particularly focused issue in the construction world, where projects can often take weeks or even months. Get Gephardt reported last week on a West Valley City family that spent close to a year trying to recover a deposit of more than $5,000 for doors after the company failed to start work. The owner stated to Get Gephardt that his company was going bankrupt.

And, as Get Gephardt has been reporting, a safety net that has existed to protect homeowners from facing liens when a subcontractor isn't paid by a general contractor— the Lien Recovery Fund — is now out of money.

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