Holiday Spending and New Year Bankruptcy: What to Consider

Could a significant amount of holiday spending result in a rise in consumer bankruptcy cases in the New Year? While there are multiple factors that impact the overall rate of consumer bankruptcy in Illinois and throughout the country, significant and widespread upticks in spending could trigger an increase in overall Chapter 7 and Chapter 13 bankruptcy filings. According to a recent report from ABC News, the overall increase in spending during the 2022 holiday season could result in a rise in consumer bankruptcy filings in 2023. Our Oak Park bankruptcy lawyers want to discuss the article and help you understand your options if you are struggling with debt.

Consumer Holiday Spending Increased in 2022

Data from Mastercard SpendingPulse shows that consumer sales during the holiday season rose by approximately 7.6 percent, with varying increases for different types of gifts and spending. More specifically, apparel sales purchased rose by about 4.4 percent, while restaurant spending rose by more than 15 percent. Some areas that usually see rises in sales during the holiday season actually say decreases in spending, such as jewelry and electronics. If consumer spending rose during the holiday season, does that mean consumers spent more than they should have?

According to the report, the increase in spending could be due in part to inflation. In other words, it may not be that consumers are buying more gifts than they did last year or enjoying more meals out at restaurants, but rather that the costs of these goods and experiences have increased due to inflation, driving up the rate of consumer spending. Regardless of the reason for the rise in spending, does this mean that more consumers may be likely to file for consumer bankruptcy in the New Year? The article suggests that increased holiday spending does not necessarily equate to a rise in bankruptcy filings, but it is especially important for consumers to think carefully about their budgets as inflation remains high.

What to Consider if You are Considering Bankruptcy in the New Year

If you are considering the possibility of filing for bankruptcy in the New Year, what do you need to think about? First, it is important to get in touch with an experienced Oak Park consumer protection lawyer who can help you to assess your financial circumstances and to determine your eligibility for personal bankruptcy. In addition, you should learn more about the different types of consumer bankruptcy that you may want to consider:

  • Chapter 7 bankruptcy, which is a type of liquidation bankruptcy that allows debtors to receive a relatively quick discharge of debts, but it requires the debtor to pass the “means test” to show eligibility and to have all non-exempt assets liquidated; and
  • Chapter 13 bankruptcy, which is a type of reorganization bankruptcy that allows debtors to reorganize debts, avoid foreclosure, and catch up on payments over a period of three to five years, but it requires the debtor to prove that they have a steady income (this type of bankruptcy is often known as a “wage earner’s plan”).

Contact an Oak Park Consumer Bankruptcy Lawyer

Do you have questions about consumer bankruptcy? One of our Oak Park bankruptcy attorneys can help. Contact the Emerson Law Firm today.



See Related Blog Posts:

Supreme Court Will Consider Bankruptcy Debtor’s Liability for Someone Else’s Fraud

Will My Small Business Be Impacted By My Personal Bankruptcy Filing?

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