According to recently released data, bankruptcy is getting less common in the United States. The data firm Epiq Systems Inc. reported that the total number of bankruptcy filings in the country declined by about 13 percent in 2013 to the lowest level since 2007.
Experts say there are a couple of reasons bankruptcy filings have been on the decline since 2010. One reason is because Congress passed a new law in 2005 that changed the rules regarding bankruptcy. The executive director of the American Bankruptcy Institute said that a pattern of lower interest rates will likely keep the bankruptcy rate on the decline.
A majority of the bankruptcy filings in 2013 came from individuals filing for Chapter 7 bankruptcy protection, but there were also many businesses that sought debt relief. A total of 44,111 businesses filed for Chapter 11 bankruptcy protection in 2013, which was a 24 percent decrease from the year before.
Even though the 2005 legislation changed the rules for filing for bankruptcy and interest rates are at historic lows, bankruptcy is still an important and valid option for individuals and businesses that are overwhelmed by debt. In fact, bankruptcy has offered millions of Americans the opportunity for a fresh start.
If you are facing serious financial problems, an experienced bankruptcy lawyer can evaluate your situation and help you make a plan, whether it is filing for bankruptcy or another debt relief option. Overwhelming debt can lead to relationship problems, health struggles and other negative consequences, which is why it's worth it to take steps toward getting out of debt.
Philadelphia Business Journal, "Bankruptcy filings lowest since 2007," Kent Hoover, Jan. 6, 2014