CONSUMERS AND BUSINESSES STRUGGLE, BANKRUPTCY RATES SOAR
High grocery costs. Supply chain delays. An increase in the cost to fill your car’s tank of gas. Businesses are struggling to get their products on the shelves. These are just a few of the frustrations that we experience in our own homes and businesses, a few of the struggles we hear about on the local news. These struggles are more than just potential issues, for many across the country these are the reality of everyday life. For some, this reality has become overwhelming. This has led consumers and businesses alike to turn to bankruptcy for relief.
ARE BANKRUPTCY FILINGS REALLY ON THE RISE?
Businesses and individuals that find themselves in this situation are not alone. The Administrative Offices of the United States Courts recently reported that bankruptcy rates in the country were up 13% as of September 2023. This signals a “moderate” increase compared to the past decade of reduced filings. The courts report business filings rose almost 30%, jumping from 13,125 to 17,051 from September of 2022 to September of 2023. Individual filings rose by 12.4%, from 370,685 to 416,607. The two are often connected. As more individuals file for bankruptcy there are often fewer consumers available to purchase products and services to keep businesses going — triggering an increase in business filings as well.
WHY ARE MORE PEOPLE FILING FOR RELIEF THROUGH BANKRUPTCY?
Experts predicted a surge after the end of federal funding related to the pandemic. Some point back even further, stating the spike has roots that go back to the financial crisis of 2008. Primary causes for financial pressure include increased interest rates and inflation. Businesses also point to increased borrowing costs and individuals struggling to keep up with high mortgage rates.
WILL THESE RATES CONTINUE TO INCREASE?
Experts further predict that the bankruptcy rate will continue to rise throughout 2023 and likely into 2024.
WHAT SHOULD I DO IF I AM STRUGGLING WITH DEBT?
It is important to determine if your debt is manageable. One way to get a better idea is to take the time to check your debt-to-income ratio. If it is 30% or below, it is likely that you can take action to help get the debt under control. This could include prioritizing debt and paying off higher interest loans first, as well as putting a budget into place and following it. It could also include negotiating with lenders to see if you can get a lower interest rate or better repayment plan.
Those who have an income-to-debt ratio of 50% or higher likely need more aggressive action. This could include bankruptcy. An attorney experienced in this area of the law can review your situation and discuss your options, better ensuring you can move forward with a fresh financial start and avoid additional setbacks. For those who are struggling with credit cards and other bills, debt feels like an endless downward spiral. However, there is hope for those who are overwhelmed by debt. Talking to an attorney is the first step towards putting an end to calls from creditors and getting free of debt faster.
Anyone considering bankruptcy should consult with an experienced bankruptcy attorney. Our Miami bankruptcy attorneys have experience with the process and can help people identify their assets, debts, and exemptions so you can choose the type of bankruptcy that suits your circumstances. It costs you nothing to schedule a free consultation with one of our experienced Miami bankruptcy lawyers to discuss how Florida bankruptcy laws can help you.