NC Bankruptcy Filings Are Down But Other Consumer Debt Stats Show This May Be Bad News - John T Orcutt Bankruptcy Blog

NC Bankruptcy Filings Down - Sign of Progress or Trouble to Come?

Submitted by Rachel R on Mon, 07/29/2013 - 3:22pm

 NC Bankruptcy Filings Down - Sign of Progress or Trouble to Come?

Image source: NCAAblog.wordpress.com

In all three of the bankruptcy regions of North Carolina – Middle District, Eastern District and Western District – when you compare January through June 2013 with the same period of 2012, filings are down roughly 15% year over year. And this continues to be a downward trend with the first half of 2013 showing a drop from 2%-10% from the second half of 2012. But whenever filings are down, we have to ask: is this a good sign or a bad sign?

To answer that, it’s important to consider other statistics that reveal things about the financial well-being of North Carolinians. We need to look at unemployment and home foreclosure rates as well as debt delinquency rates to get a more informed picture of what the bankruptcy statistics might mean and whether NC’s economic future is getting brighter or dimmer.

Unemployment Statistics

You can see on the chart below that the unemployment rate is slowly moving down, but that doesn’t necessarily mean there are less jobless in North Carolina. The majority of the decline in joblessness is attributed to hospitality and leisure industries which are predicted to reverse in coming months.

Image source: NCESC.com

And even if unemployment numbers are buoyed right now, starting this week, many long-term unemployed will take a hard hit when federal benefits dry up because North Carolina has refused to allow them to continue. This is going to hit many people very hard. As of this week, 71,000 people will lose benefits with another 100,000 to lose funds later this year.

Foreclosure Statistics

For the first half of 2013, a little more than 25,000 homes were foreclosed on compared to more than 26,600 during the same period in 2012. The last half of 2012 saw a steep increase in foreclosures with more than 28,000 homes lost in this period. This overall decrease can be seen as a reflection that homeowners are now more able to keep their homes – that’s a good thing.

Or… it could be a sign that with real estate values still depressed, lenders are increasingly pulling a “walk away” and not investing in enforcing a foreclosure because it costs more than the home is worth. Taken with improved unemployment numbers and lower bankruptcy filings, this could spell a more optimistic outlook for our state or a portent of worse to come.

Image source: Blog.TimesUnion.com

Debt Delinquency Statistics

According to TransUnion data, North Carolinians have a .75% delinquency rate on credit cards. This is a little higher than the national average of .69%. North Carolina also has one of the country’s highest credit card debt totals per consumer at around $6,000 per consumer. What’s also important to note is that both the balances and delinquency rates are climbing for NC residents even as they drop throughout most of the rest of the country.

So What’s the Reality?

For now, with personal debt rising and unemployment compensation about to take a nose dive, it doesn’t look like half-year statistics are promising for North Carolinians already in financial straits. The decline in bankruptcy filings may also be a function of either the expense of the filing or the inevitability of losing a home. Many people file bankruptcy to try and save their home, but when this becomes unavoidable, many simply abandon their delinquent mortgage and move on.

No matter what your situation, a consultation with a reputable North Carolina bankruptcy attorney can help. Even if you’ve lost your home, a bankruptcy filing can clear out any remaining debts and create a clear path for a financial reboot for you. To find out how you can get a fresh financial start with a bankruptcy for zero money down, contact us for a free consultation today!

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