The patterns of people filing for bankruptcy in Virginia and around the country often correlate with economic trends. An expanding economy and lowered unemployment rate may lead to fewer bankruptcies while downturns or higher interest rates may force more debtors to seek relief through the courts.
Recent reports indicate that bankruptcy filings in the U.S. have been on a downturn. In fact, the number of people filing for bankruptcy in 2017 has been the lowest since 2007. For many analysts, this is good news, indicating that people are less stressed economically and are better able to manage their finances.
Other analysts, however, are more cautious. They note that while the number of bankruptcies has declined, seeing over 750,000 filings still means that many Americans are in a difficult financial state. In addition, there are multiple circumstances that could lead to increased filings. For example, surprise downturns in the economy can and do occur. In addition, interest rates may rise, which can lead to more individuals and businesses seeking debt relief.
Individuals who are concerned about their finances and have had difficulty making other options work may decide to consider Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, debtors are able to ask the court to discharge all eligible debt after liquidating nonexempt assets, which are then used to repay creditors. In Chapter 13 bankruptcy, a debtor can hold onto assets such as a home or automobile while repaying creditors in a court-supervised payment plan.
Individuals and couples considering bankruptcy may benefit from speaking with an experienced attorney. The lawyer may be able to review the client’s situation, make recommendations regarding whether bankruptcy is the right option and assist in determining which type of bankruptcy the client qualifies for.