Personal bankruptcy rates are on the decline, but why?

Filing for bankruptcy is often the most effective way for struggling Connecticut consumers to deal with their overwhelming debt. Despite this, fewer people are pursuing personal bankruptcy than just a handful of years ago. Experts have a few ideas as to why this is, including things like improved health care coverage and the costs associated with filing.

Back in Sept. 2010, there were approximately 1.6 million bankruptcy filings, 1.53 million of which were consumer cases. Fast forward to Sept. 2018 and the story is much different. There were only around 770,000 bankruptcy filings that month, a significant drop off when only eight years earlier many more consumers seemed to be struggling to repay their debt. Although this was in the middle of the Great Recession, there is probably more at play in these changing numbers.

Medical bills are a significant contributor to bankruptcy filings. Since 2008, health care coverage for the average American has improved. Better coverage often equals fewer or more affordable bills, so people are less likely to need bankruptcy after seeking necessary medical care. Homeowners are filing bankruptcy less frequently, too. This is largely because Recession-era programs give lenders the ability to work directly with the bank to avoid foreclosure.

The news is not all positive, though. There is also a cost associated with filing for bankruptcy, and those who are already struggling might find it difficult to find a way to pay the associated fees. Although it might feel impossible at times, those in Connecticut who are struggling are well-advised to speak with an experienced attorney who can help explain their options in regards to personal bankruptcy.