Bankruptcy is often the last recourse for consumers who find themselves buried over their head in debt. With the high use of credit cards, foreclosures, and the possibility of a recession cases of bankruptcy among individuals have seen a sharp rise.
The Bankruptcy Institute has recently released a report stating that bankruptcy among individual consumers has risen over 27% in the first quarter of 2008 when compared with the same time last year. Individuals who filed in March numbered 86,165 where only 76,120 filed for bankruptcy in February. This is a 13% increase in the first three months of 2008 alone which is an alarming amount.
There are several reasons for the growing number of Bankruptcy cases most due to the “heavy burden of household debt and growing mortgage problems” as said by Samuel J. Gerdano, who is the ABI Executive Director. The tendency is expected to grow throughout the remainder of the 2008. Some experts even forecast that the start of 2009 will see much the same until finally settling.
Most of these bankruptcy filings, around 32%, are for Chapter 13 which allows the individual to repay creditors with a portion of their income. Bankruptcy is a devastating blow to one’s credit score and financial stability and is often used as a last resort. The increasing number of bankruptcies is a foreboding sign in an already weakening economy.
For individual leaning towards bankruptcy they should understand what risks come with it along with the financial impact. Many individuals should seek assistance when dealing with debt. There are several debt assistance companies that will be willing to work with individuals who are facing the possibility of bankruptcy. Experts agree that individual consumers generally benefit from such assistance that can provide one on one counseling in credit matters along with other services. Often times, by using such services individuals will be able to gain lower interest rates on loans and credit cards.
With bankruptcy expected to continue to grow more and more individuals are turning to debt management as a means to assist in relieving their financial burden.
Recent additions:
- Mortgages Affected By Global Finance Crisis
- Resist the Urge to Pay Taxes with Credit Cards
- Bankruptcies Increase By 38% Last Year
- Delinquencies Rise on Credit Card Accounts
- Worries About Recession Loom Large
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