Bankruptcy Filings at Lowest in 15 Years

Although the COVID-19 pandemic has resulted in millions of job losses, and individuals and families alike taking on unexpected debt to pay for medical care and necessities, consumer bankruptcy filings are not on the rise. Indeed, according to a recent article in DSNews, as of January 2021, bankruptcy filings reached their lowest point, number-wise, in 15 years. Bankruptcy filings have not been this low since February 2006, prior to the recession and the foreclosure crisis. The new data reported by DSNews comes from Epiq, which recently released its January 2021 bankruptcy data. Bankruptcy rates have been gradually declining, and the most recent figures represent a 6% decrease in filings from December 2020.

We want to discuss the recent data with you and to say more about personal bankruptcy filings during the coronavirus pandemic.

Fewer Americans Are Filing for Consumer Bankruptcy

The key takeaway from the recent DSNews article is that fewer Americans are filing for consumer bankruptcy, and during a time in which many Americans are suffering financially. According to the article, “the optimism around a new political administration and potential new government relief for consumers has kept new filings historically low.”

In terms of Chapter 13 bankruptcy filings, those non-commercial filing rates are down by about 4% compared with December 2020, with only 8,972 new Chapter 13 bankruptcy cases filed. Non-commercial Chapter 7 cases—meaning consumer Chapter 7 cases—are also down significantly. In January 2021, only 21,225 new Chapter 7 non-commercial bankruptcy cases were filed, which represents a decline of 6.5% from December 2020. Although bankruptcy filings are currently down and unemployment rates have stabilized, an Epiq spokesperson expects that bankruptcy filings are not likely to stay this low. To be sure, the article reports that Epiq “expect[s] new filings will grow substantially in the second half of 2021, notwithstanding any likely short-term stimulus.”

What You Should Know About Filing for Consumer Bankruptcy

Even though consumer bankruptcy filings are currently low, it is important for consumers who are struggling with debt to know that bankruptcy may be an option. If you are thinking about the possibility of a liquidation bankruptcy, you should keep in mind that you will need to be able to pass the “means test” to qualify for Chapter 7 bankruptcy. In order to be eligible for Chapter 13 bankruptcy, you will need to be able to show that you earn a regular wage and can afford to make payment for three to five years on a bankruptcy repayment plan.

There are benefits and limitations to each type of consumer bankruptcy, and it is important to discuss your situation with an experienced Oak Park bankruptcy lawyer.

Contact Our Oak Park Bankruptcy Lawyers

Do you have questions or concerns about filing for consumer bankruptcy during the pandemic? Do you want to learn more about your eligibility for Chapter 7 or Chapter 13 bankruptcy? One of our experienced Oak Park bankruptcy attorneys can help. Do not hesitate to get in touch with us to learn more about our services. Contact the Emerson Law Firm today.


See Related Blog Posts:

Can I File for Bankruptcy if I owe Money to a Loved One?

Can I Modify a Chapter 13 Bankruptcy Repayment Plan?

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