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The new year could see a radical increase in bankruptcy filings
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The new year could see a radical increase in bankruptcy filings

On Behalf of | Jan 28, 2022 | Uncategorized

Floridians and people throughout the United States have experienced the ups and downs of financial hardship over the past two years. The ongoing national situation has changed the landscape with job loss, reduced income, healthcare expenses and financial assistance from the government. The government help is an added layer to the normal financial challenges that often spur people to consider their options, one of which is bankruptcy. Statistically, 2021 saw a vast decrease in the number of people who filed when compared to 2020. However, there is concern that 2022 could see a major spike in bankruptcies. For those who are confronted with financial woes that have become too difficult to manage, bankruptcy might be a worthwhile strategy.

Bankruptcies reduced by nearly 30% in 2021

According to a report about the federal courts, there were just over 434,500 bankruptcy filings though the first third of 2021. That is around 30% fewer than the more than 612,500 filings at that same time one year earlier. In 2019 – before the current circumstances exploded – there were 776,674 filings. Researchers and experts are trying to determine why there has been such a marked reduction.

Certainly, the attempts on the part of the government to offset people’s financial struggles such as eviction moratoriums, stimulus payments, breaks in paying student loans and extended unemployment benefits have helped. If the decline in bankruptcies is due to these steps, then it is understandably worrisome that once they come to an end, people will begin filing for bankruptcy to get financial relief. Because bankruptcy can clear unsecured debt like credit cards and medical bills, then it could be viewed as the logical decision if people are still dealing with the financial problems that were manageable because of the above-listed interventions.

As financial concerns come to the forefront, bankruptcy may be beneficial

Avoiding bankruptcy is often a primary motivator for people to search for alternative solutions to their debt problem. That is frequently due to them not understanding the potential positives of a Chapter 7 or Chapter 13 bankruptcy filing. Certain properties can be retained and bills can be cleared giving debtors a financial fresh start. It will also put an end to harassing calls from debt collectors. With the remaining questions about the job market, medical issues, debt and what might happen in 2022, it is important to be aware of the benefits of bankruptcy and have assistance in making an informed choice.