Bankruptcy is a tool that can be used to help you get out of debt when you feel overwhelmed and cannot pay back what you owe in a reasonable amount of time. Bankruptcies come in a number of forms and are designed to limit how much a person pays back based on their financial circumstances.
Bankruptcies can offer relief to those who are struggling to pay their debts, whether they’re students with a large amount of unsecured debt or people who have struggled because of medical debt.
A March 7 report went over how bankruptcies are looking in America, and signs are showing that they are increasing. According to data from February 2022 on the Epiq Bankruptcy Analytics platform, new filings for all chapters of bankruptcy were up 3.2% compared to January. There were approximately 26,985 new filings.
Commercial filings were down, so it would seem that it’s consumers who are struggling most at the moment. With the current economic status and ongoing problems with the job market and high inflation rates, this makes sense but is still something to address.
Chapter 7 bankruptcies were up in February
January saw only 14,295 bankruptcies, but February saw an increase of 1.1% with 15,196. Compared to 2021, bankruptcies are down around 29.9%, but the impact of bankruptcies does vary by state. For example, California has seen the most new Chapter 7 bankruptcies followed by Florida, Illinois, Michigan and Ohio.
What should you do if you’re struggling with debt in 2022?
It is hard to struggle with debt. You deserve the opportunity to work through your budget and debt balance to see exactly where you are and to determine if bankruptcy may be right for you. Usually, if you begin to fall behind on payments or have a debt load that is much higher than your income, it makes sense to look into bankruptcy to help you get a fresh start.
Bankruptcy could be the right solution for you, but there are other options to consider as well. For that reason, now may be a good time to look into all your legal rights and options for moving forward and reducing or eliminating your debt.