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Bankruptcies expected to increase in 2021

| Nov 2, 2020 | Chapter 7 Bankruptcy

A lot of Americans have fallen on hard times. Many have lost their jobs or seen their hours dramatically reduced while at the same time trying to find a way to deal with ever-growing medical and student loan debt. Credit cards and other types of loans might help bridge the gap, but high interest rates and poor financial prospects can leave these individuals sinking deeper and deeper into debt.

More bankruptcy filings are expected in 2021

If you find yourself facing these financial challenges, you’re not alone. In fact, it’s estimated that more than 500,000 people will file for either Chapter 7 or Chapter 13 bankruptcy in 2020. That number is expected to nearly double in 2021 as government assistance wanes during the pandemic recovery and student loan balances continue to balloon.

Why do so many people turn to personal bankruptcy?

There are a lot of misconceptions about bankruptcy. A lot of people think that it leaves you penniless and unable to secure credit for a very long time. As a result, many individuals choose to try to dig themselves out of the hole, spending years, maybe even decades, struggling to get by. This is no way to live.

What the millions of people who have successfully sought bankruptcy protections know is that the process can provide enormous relief. It can shed debt while at the same time allowing you to retain the assets you need to have a firm financial foundation post-bankruptcy. You can even reaffirm some of your debts so that you can keep the assets that are most important to you. Also, although rebuilding credit after bankruptcy can take some time, it’s far from impossible. In other words, you have a future after bankruptcy.

Of course, bankruptcy isn’t automatic, which is why many people choose to work with an attorney who is experienced in this area of the law. By doing so, you can increase your chances of obtaining the debt relief you need and the fresh financial start you deserve.