Back in June, we discussed how a predicted rise in bankruptcy filings in the first half of 2021 did not happen. Despite the economic recession that the pandemic triggered, bankruptcy filings were down compared with 2020, which in turn had fewer filings than 2019.
That trend continued through the rest of 2021. By the end of September, 434,540 individuals and businesses had filed for bankruptcy protection. That represented nearly 30 percent fewer filings than over the same period in 2020. It appears that things like stimulus checks, enhanced child tax credit payments, and the federal moratorium on evictions all helped struggling families in South Carolina and nationwide keep their heads above water.
Economic supports are going away
But stimulus payments and the child tax credit have stopped, and the eviction pause is currently scheduled to end after May 1. Without these protections, more Americans could decide now is the time to move ahead with Chapter 7 or Chapter 13 bankruptcy. Meanwhile, household debt loads (excluding mortgages) rose $61 billion in the third quarter of the year, putting further pressure on millions of families.
Finally, some experts say the average person goes through about two years of financial crisis before filing. As we approach the second anniversary of the pandemic’s effects on the U.S. economy, more people who have been struggling throughout that time could decide to file.
Is bankruptcy right for you?
Whether bankruptcy filings go up or not this year does not matter as far as your family’s needs are concerned. What is important is doing what you can to end harassment from debt collectors and get out of debt. Bankruptcy is a good option for many people in this situation.