Submitted by Jen Jones on Mon, 08/15/2011 - 11:20am
Some are calling a recent drop in consumer bankruptcies during the first half of 2011 a sure sign that the tides may finally be turning for the U.S. economy, as these new figures from the American Bankruptcy Institute Americans fuel the idea that American may be more financially stable in 2011 than they were at the same time last year.
According to the new data, consumer bankruptcy filings across the country totaled 709,303 during the first six months of 2011, a full eight percent less than the 770,117 filed during the same period in 2010. What’s more, using data provided by the National Bankruptcy Research Center, the ABI reported that there were 11,768 consumer bankruptcy petitions filed in June 2011, a five percent decrease from the number filed in June 2010.
Some believe this fall in this year’s bankruptcy filings from the disheartening figures in 2010 is a direct result of a post-recessionary rebound for many average American families whose budgets were depleted at the height of the three-year economic downturn. "The drop in bankruptcies for the first half of the year shows the continued efforts of consumers to reduce their household debt, and the overall pull back in consumer credit," ABI Executive Director Samuel J. Gerdano said in a statement.
Nevertheless, it’s not all good news on the financial front, as June 2011 bankruptcy filings represented a 4 percent increase from the 114,803 petitions submitted in May, and well over a million petitions slated to be submitted across the country by year’s end.
The culprit for this sudden uptick in filings from May to June could be explained by an unsavory June jobs report, stoking fears of an impending return to recessionary conditions. The grim government report, released last week, revealed a net gain of 18,000 jobs in June, dashing economists hopes that it would show an anticipated 120,000 private sector jobs added to the economy last month—even then, barely enough to keep pace with population growth. Instead, these disheartening numbers deepened fears that the American job market is far from in recovery and pushed the unemployment rate from 9.1 percent to 9.2 percent.
This protracted period of employment stagnation is taking its toll on many who thought that pull themselves out of the financial hardships that affected many households as a result of the Great Recession. "I have had more emotional and psychological ups and downs than I want to count," Fran Hopkins, a resident of Cedar Grove, N.J., who has been out of work for a year and a half (and who writes a blog for the Maplewood Patch) told Patch.com. "Your hope soars when you snag a job interview; then it's dashed when there's no job offer. Repeat this over and over again and you start to feel like it's better not to get your hopes up."
And so in June more people—whether unemployed or underemployed—found much-needed “hope” in the safe havens of bankruptcy, turning to options like Chapter 13 and Chapter 7 to make surviving through this stagnant period a bit more bearable. Chapter 7, otherwise known as a “liquidation bankruptcy, allowed these financially-affected folks to discharge mountains of unsecured debt, and begin again, on a level playing field, with fewer burdens to begin more healthy economic strategies. Others chose Chapter 13 to restructure their beleaguered budgets, beginning to repay some or all of their debt—albeit in a realistic and manageable way—while still holding on to major valuable assets like homes, cars, and various accounts.
Regardless of the consumer bankruptcy you choose, a skilled attorney can help you navigate the nuances and intricacies of the bankruptcy process. If you live in North Carolina, contact the Law Offices of John T. Orcutt TODAY for a totally FREE debt consultation. Just call toll free to +1-833-627-0115, or make your appointment online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.
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