The Administrative Office of the U.S. Courts tracks bankruptcy filings nationwide, following trends over 12-month periods. Its most recent tracking found that personal bankruptcy filings declined over the past year, indicating that the current economic state is relatively stable. Although this might come as good news for South Carolina consumers, some bankruptcy experts believe that filings could soon be on the rise.
There were over 790,000 bankruptcy filings in the year ending Sept. 2017, which was only slightly lower than the approximately 850,000 bankruptcy filings from the previous 12-month period. This past year boasted the lowest bankruptcy filings since 2007. However, it was also the smallest yearly decline in six years since bankruptcy filings began to decrease.
One expert on the matter expressed concern over interest rates that are expected to rise soon. With hundreds of thousands of individuals still in struggling financial situations, this could result in higher levels of debt. When debtors are already walking a financial tight rope, even a slight change in debt can be enough to push them over the edge.
Many economists use bankruptcy filings when considering the health of the economy. When filings are low or declining, many people assume that everyone’s situation is improving equally. Unfortunately, even as economic times improve, job loss, unexpected medical bills and other financial disasters can still push people in South Carolina into unfathomable amounts of debt. In such instances, filing for protection through either Chapter 7 or Chapter 13 bankruptcy can be a smart and conscious path toward future financial health.
Source: Bloomberg BNA, “Bankruptcy Filings Hit 10-year Low, May Rise Again”, Diane Davis, Oct. 18, 2017