Why are bankruptcy rates on the rise this year?
The number of personal as well as business bankruptcies in the U.S. has been increasing recently. There were 5% more filings in July of this year than in June. There were about 1,000 more consumer bankruptcies during the first seven months of this year than the same period in 2018, according to the American Bankruptcy Institute.
These bankruptcy filings have a number of causes. Some people get loans when they don’t have the money needed to make the payments. Unexpected events like the loss of a job or a health issue also cause some people to determine that bankruptcy is their best option. Job loss often means loss of health insurance, which doubles a person’s likelihood of filing for bankruptcy.
However, it’s necessary to put things in perspective. Compared to 2010, when America was just beginning to emerge from a devastating recession, bankruptcy filings were down considerably last year. Experts credit low unemployment, a bull market and greater consumer confidence in the overall economy.
That confidence, however, has led some people to spend beyond their means. The Federal Reserve Bank of New York says that consumer household debt was at $14 trillion for the first quarter of this year. That’s up $1 trillion over 2008.
Southern states tend to have the highest rates of both personal and business bankruptcy. Four out of the five states with the highest rates are in the south.
Regardless of what the trends and statistics show, the only bankruptcy that matters is your own. That’s why it’s essential to have an experienced bankruptcy attorney to help you through the process so that you can start rebuilding your financial future.