Thinking of filing for bankruptcy in 2023? If so, then you are not alone. Individual rates continue to rise, and corporate bankruptcy filings are on track to reach the highest rate in over ten years. Individual petitions for relief from bankruptcy are also going up and increased by 2%.
Why the increase in bankruptcy filings?
Financial experts the problem is connected to low interest rates. When rates were low, people were more likely to take out loans and take financial risks. Now, with the swing to higher interest rates and a soaring inflation rate, companies and individuals alike are feeling financial strain.
Another likely issue: the pandemic. Courts, like everything else in the country, essentially shut down during the pandemic. This made it more difficult to move forward with bankruptcy. Add in the end of economic stimulus packages and other protections and it is no surprise that we will likely see the rate of bankruptcy filings continue to rise as people recover from the financial and emotional strain of living through a global pandemic.
Is this normal?
Our country’s founders felt the need to include bankruptcy protections to help encourage economic growth and innovation. The presence of bankruptcy is a constant and the rates typically ebb and flow. Financial experts point out that the spike in consumer-based business bankruptcy filings like those we see with Party City and David’s Bridal could signal financial constraints for consumers. This may be a sign of a potential jump in consumer bankruptcy filings in the near future.
What if I am struggling to make ends meet?
Bankruptcy is an important part of this country’s economic structure. As such, those who are considering bankruptcy should not be ashamed. Bankruptcy is a legal and protected tool to help you get back on your feet and start with a fresh financial future.