Since 2010, fewer people each year have been filing for bankruptcy in Michigan and nationwide, and this year is no exception. While most would consider this a sign of an improving economy and job market, that is not necessarily the case. More consumers are now curbing the type of behavior that led to filing for Chapter 7 or Chapter 13 bankruptcy during the recession. However, many Americans are still struggling to pay down their debts.
This year, about a million consumers in the U.S. are expected to file for bankruptcy. This figure is 20 percent lower than last year. This could be due to the fact that consumers are still concerned enough about finances to keep their spending in check. Additionally, job and economic growth continue to be sluggish.
Consumers have increased their debt in recent years when it comes to homes and cars, but it may be some time before this type of debt leads to bankruptcies. This is because more people are learning to live within their means and are not relying on additional income from overtime, bonuses or raises. Additionally, more lenders are willing to negotiate repayment terms if a consumer is having trouble paying.
Even in good economies, there are many in Michigan and elsewhere who are overwhelmed with debt. When this happens, a consumer may find it beneficial to research his or her options. In some cases, filing for Chapter 7 bankruptcy may be a good option. This type of bankruptcy discharges most or all debts, which may allow the consumer to start with a clean slate and work toward a healthier financial future.
Source: The Columbus Dispatch, “Consumers taking on less debt, filing fewer bankruptcies,” Mark Williams, Aug. 3, 2013