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?

Comments

Post a Comment

Popular posts from this blog

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more