Although there has been a lot of talk lately about the improving economy, many Americans are still struggling with debt. In fact, The American Bankruptcy Institute found that bankruptcy filings increased by 5% in July compared to June. That amounts to more than 64,000 bankruptcy filings last month alone, with over 450,000 petitions being filed so far this year. So that means that Texans who are finding themselves overwhelmed with debt certainly aren’t alone.
There may be several reasons for the increase in bankruptcy filings. Many people who wind up filing for bankruptcy do so because they have been hit with unexpected and significant expenses. Medical expenses often spur bankruptcy petitions, especially when individuals have seen a lapse in insurance coverage or they have lost their job.
Recent data also shows that consumer spending is up, with $14 trillion in household debt being held by consumers in the first quarter of this year. There’s no doubt that the country’s economic conditions have improved significantly since the Great Recession. It took a while, but many consumers are just now feeling confident in the economy, which has led them to take on more debt than they previously held. While there is nothing wrong with doing so, some consumers find themselves overstretched and in need of financial relief.
There are a lot of debt relief options available to consumers, but sometimes the most effective is personal bankruptcy. Through a Chapter 7 bankruptcy filing, an individual may be able to eliminate many of their debts and secure a fresh financial start. Even a Chapter 13 bankruptcy can result in a repayment plan that eases many debts. Successfully pursuing bankruptcy isn’t always easy, though, which is why it is often wise for those who are facing financial difficulties to work closely with a legal professional who can help put them on a path to financial freedom.