Consumer Bankruptcies Increase Nationwide

While Oak Park residents will not find themselves in one of the states with the most drastic increases in consumer bankruptcy filings, according to a recent article in MarketWatch, the recent rise in bankruptcy filings suggests that both individual consumers and businesses alike are struggling to repay debt. The article cites new data from the American Bankruptcy Institute (ABI), which indicates that there were a total of 64,283 bankruptcy filings in July 2019. To put that number in perspective, it represents a 5% increase from the same period in 2018 in which there were a total of 62,241 bankruptcy filings.

Given that they had recently reached a 10-year low, should consumers be worried about the increase rate of bankruptcy filings? The following will discuss the above-mentioned article and consider the potential impact of a rise in consumer bankruptcy filings.

Bankruptcy Filings Have Been Increasing in 2019
Over the course of 2019 thus far, bankruptcy filings have been increasing in relation to the rate of filings in 2018 and years immediately prior. In other words, the rate of bankruptcy filings in July 2019 is not an anomalous spike in filings. Rather, it is part of a trend. During the first seven months of 2019, bankruptcy filings totaled 452,797. That number rose from 450,568 during the same monthly period in 2018. To put the increase in filings another way, there were more than 2,000 additional bankruptcy filings between January and July in 2019 than there were between January and July in 2018.

Of that increase in bankruptcies, there were approximately 1,000 more Chapter 7 or Chapter 13 consumer bankruptcy filings. The remaining bankruptcy numbers—of the 2,000-plus increase—were business filings.

Increase in Bankruptcy Filings May Not be As Stark as You Think
While more than 2,000 additional bankruptcies, or a 5% rise in filings, might seem high, the article actually describes the increase as a “slight rise in bankruptcies.” When we compare the current bankruptcy rate with the rate of bankruptcies from 2010 (toward the beginning of the financial crisis), the present number is significantly lower. To be sure, in 2010, there were approximately 1.6 million bankruptcy filings. In 2018, the yearly total was right around 770,000.

In short, consumers should not worry. According to the ABI executive director, one of the reasons that we may be seeing more bankruptcy filings this year is that amendments to U.S. bankruptcy law now make it easier for veterans, family farmers, and small businesses to have bankruptcy protection. Moreover, the increase in filings is more notable in some states than in others. The ABI cites bankruptcy upsurges in Alabama, Tennessee, Georgia, Mississippi, and Nevada as the places in which more consumers are filing for bankruptcy.

Contact a Bankruptcy Lawyer in Oak Park, Illinois
Bankruptcy can be a debt relief option for consumers who are struggling to pay credit card debt, medical bills, and other outstanding debts. If you have questions about whether Chapter 7 bankruptcy or Chapter 13 bankruptcy could help you, it is important to discuss your situation with an experienced Oak Park bankruptcy lawyer. An advocate at our firm is here to answer your questions. Contact the Emerson Law Firm to learn more about how we assist consumers in Chicagoland.



See Related Blog Posts:

How to Defend a Debt Collection Lawsuit

Bankruptcy Mistakes Versus Bankruptcy Fraud

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