Why Is The Number Of Americans Filing Bankruptcy Decreasing?

October 29, 2011 by  Filed under: Bankruptcy 

Recently, the U.S. Bankruptcy Court released the number of those filing bankruptcy in 2011 so far. The surprise was that it has dropped. The unemployment numbers nationwide are over 9.2% and some states like California are seeing unemployment numbers of over 12%. So you would think with unemployment being so high that the numbers of those filing bankruptcy would be high also. This is becoming a topic for debate by economists and even on blogs nationwide.

Looking back, in 2005 Congress amended the bankruptcy code because they believed there were too many people abusing the bankruptcy system. There have been many debates about this topic in itself. But it is what it is and the law changed. There was a rush of bankruptcy filings prior to the code change and then in 2006 there was a significant drop in individuals filing bankruptcy. This continued on until the economic fiasco of 2008 when the real estate market began its meltdown along with the world’s banks. This one-two punch to the economy of the US started the fall of the house of cards with many Americans ending up in foreclosure. Along with the foreclosure came bankruptcy as the unemployment rates began their rise to where they’re at now. In 2008 there was an increase in individuals filing for bankruptcy which continued on through 2010 with a record year of close to 1.6 million Americans filing bankruptcy. That’s why so many people are perplexed why 2011 has seen a decline in bankruptcy.

One bankruptcy attorney had said online that they were seeing families coming in for consultations that were too broke to file for bankruptcy. They continued on saying that they’re seeing individuals that their unemployment has run out, their house is gone to foreclosure and they really have nothing left for the creditors to take so what’s the point. The only reason they’re considering filing for bankruptcy is to stop the harassment.

This story repeats itself through the fabric of American suburbs. What these people don’t understand is how it could’ve been much easier on them if they had made the decision to file bankruptcy earlier before they lost all their property. The only advice that could be given to this kind of individual is to wait until they can find some kind of work and meet their essentials to survive, like food and shelter before they consider a bankruptcy filing. Many individuals facing this situation feel like there’s no way out because if they do get any money, their creditors are sitting outside like wolves to take it.

Considering all of this, the newly unemployed should be taking a serious look at filing bankruptcy. The way the economy is gone there’s a good chance they might end up in the same situation as these others. When facing financial difficulties it would have been better for these poor folks to immediately seek professional advice from a bankruptcy attorney. It might’ve been able to reduce some of the pain they’re facing now.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

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