Why bankruptcies may increase as the economy improves

It is no secret that many residents of Florida have struggled finically over the last several years. With a sluggish economy and a high-rate of unemployment, it was difficult for many families to pay their bills. As a result, some people found refuge in bankruptcy. Now that the economy is improving, will bankruptcy filings decrease?

Under current bankruptcy law, a person is only allowed to file Chapter 7 bankruptcy once every eight years. This has not always been the case, however. Before the law was changed on October 17, 2005, debtors could file for Chapter 7 bankruptcy once every six years. In the months before the law changed, some areas of the country saw a surge in filings. As of next month, eight years will have gone by since the law was amended, meaning many people will be eligible to file again.

Some financial experts believe that bankruptcy filings may rise in the coming years, despite the improving economy. Over the last five years, many consumers have faced financial challenges. As a result, people have been cautious about overspending and accruing credit card debt. Now that things are looking up, however, people may slip back into old spending habits.

If you are overwhelmed with unpaid bills and looking to stop creditor harassment, you may want to consider filing for bankruptcy. Doing so can help you give you a fresh financial start and can bring a welcome sense of relief. For more information on personal bankruptcy, you may want to contact a lawyer.

Source: The Fresno Bee, “Bankruptcy can provide Valley residents relief from crushing debt,” Tim Sheehan, Sep. 6, 2013