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Here’s some good news for North Carolina residents of Wake County! There another drop in the number of Wake County residents who filed for bankruptcy protection last month and that continues a three-year trend. So, what is the reason for the decline and will the trend last?
During March 2013, a total of 161 local debtors sought out the help of North Carolina bankruptcy attorneys and petitioned the court for bankruptcy protection according to the U.S. Bankruptcy Court for the Eastern District of North Carolina. That’s a mind-blowing 30 percent decrease in the number of filings that were seen in Wake County during March 2012. Actually, the number of Wake County filings has been decreasing by leaps and bounds since early 2010. What’s even more promising is that Chapter 7 bankruptcies, which account for most of all filings, are declining. Most experts say that the reason for the decline is that the United States now has a rebounding economy.
Unfortunately for many businesses, that declining trend is not being seen. With a real estate market that has yet to fully recover from its collapse, limited liability companies that developers often use for individual buildings continue to file for bankruptcy in the Wake County area in higher numbers. This means more businesses are moving out of their spaces and low property values force the banks to demand higher down payments from potential buyers.
Many experts are asking if the reason for the decline in bankruptcy filings is due to the filing costs. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act was passed. What this Act did was to raise the cost of bankruptcy filing in an effort to decrease the number of filings around the country. It also added several more requirements to the filing process, like additional paperwork that needed to be completed and forcing applicants to receive credit counseling services before being granted bankruptcy protection from the court.
The real effect of the Act is not that clear, as the bankruptcy filing numbers have only fallen from 1.4% in 2004 to 1.3% in 2012. Even though the cost and effort of the filing process have changed, it appears that the average income of Wake County bankruptcy filers has increased. Some people, however, voice concerns that these bankruptcy fees may be too expensive for some people to afford…essentially meaning their finances are so bad that they cannot afford to pay for a bankruptcy.
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Affording to File Bankruptcy
What is interesting is that a group of professors from Columbia University, the University of Chicago and Washington University in St. Louis decided to conduct a research study about spikes in the number of bankruptcy filings around the country. In the last several years, they noted that there was a huge spike in the number of bankruptcy filings after people received their income tax return rebates. According to all the data the group compiled, they estimate that in 2013, around 200,000 people (who might not otherwise not be able to afford filing for Chapter 7 bankruptcy) will end up using their tax return refunds to file for Chapter 7 bankruptcy.
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What Does All This Mean?
So in the end, what does all this data really mean if you are thinking about filing bankruptcy in North Carolina? Even though bankruptcy filings have been decreasing for several years, there is reason to believe you may see them slightly increase in 2013. It is possible that many people who filed Chapter 7 bankruptcy during 2005 have been unable to find steady employment and, as they are now eligible, need to file Chapter 7 bankruptcy again.
If you are facing a mountain of debt, the loss of your home, having your wages garnished or being relentlessly harassed by collection agencies, contact a reliable North Carolina bankruptcy lawyer today. It’s the very best way to discover your options and resolve your financial problems.
Dedicated to helping residents of North Carolina find the best solutions to their debt problems. Don’t waste another day worrying about your debt. Call 1-888-234-4181 today to schedule a free initial consultation to discuss your bankruptcy options.