According to reports, there are now more Americans struggling to pay their bills. So much so that there is a significant number of men and women filing for personal bankruptcy to get out from under their debt. In the month of July 2014, for example, there were 96,000 new bankruptcy filings in the United States. The number of bankruptcy filings is up by 30 percent of the previous year. This is a dramatic rise in the number of people filing for personal bankruptcy.
Why Are So Many Bankruptcies Occurring?
As for the reasons for why it is happening, a variety of factors are contributing to the huge increase. For some families, including those that own small businesses, economic conditions continue to cause them to struggle. In addition to limited employment options, many Americans are also seeing the price of food soaring. Additional factors leading to the increase in the number of bankruptcies include rising debt and falling home values. Many family budgets are being pushed to their worst level with overall living expenses increasing month-to-month.
According to experts, the rise in bankruptcy filings happens for a variety of reasons, but generally stems from a combination of too many harsh economic factors and rising costs facing American families. The surge in bankruptcy filings takes into account the laws passed in 2005 that made it more difficult for people to file bankruptcy, indicating that there is a high level of struggle present today, read the law changes here. Experts also say that the increase in filings is not due to overspending on credit cards, but a direct indication of a struggling economy.
Even more shocking to some is that the surge in bankruptcies hasn’t reached its peak point just yet. It was expected that, throughout 2014, more than 1.1 million households will file. This is also a significant rise in bankruptcy filings over 2012. Nevertheless, many people are finding they simply have no choice but to file.
What Families Are Doing to Get Back on Track
There’s evidence that families are trying by reducing shopping, cutting back on travel, and even clipping coupons. Many families are working additional jobs, but finding employment is hard to do in many areas. In some cases, employers have reduced hours due to the financial requirements of Obama’s Affordable Care Act. In other locations, economic conditions still are not the way they used to be. This continues to make it hard for families to get back to working.
In some situations, these families are losing their homes as a result of having to file bankruptcy. This further strains their financial health and, in many cases, continues a cycle of financial struggle. For some, though, bankruptcy provides the help needed to at least get some relief from debts.
For many American families, the combination of a poor economy or one that has yet to fully catch up to the demands and needs of families, alongside rising costs in food and every day expenses has led to the need to file bankruptcy. In the United States, filing bankruptcy is a means of reducing debt while maintaining assets necessary to help the individual to gain financial freedom in the future. Though not easy to do, it is a necessary step for families who cannot find the work or income to support their day to day needs.