A generation once unfamiliar with the notion of saving money for a rainy day has apparently learned the lesson. This change appears to be due, at least in part, to the tanking of the real estate market throughout the nation. The change is illustrated in the decrease in the number of bankruptcies that have been filed not only, as we discussed in a previous post, in South Florida, but throughout the nation as well.
As a result of the burst housing bubble consumers began decreasing the amount of household debt. In addition, those same consumers started to save, putting money away instead of spending it. Throughout the nation, between the months of April and June, people saved approximately 4 percent of their income. In 2005, the US Commerce Department reported that number was only approximately 1 percent.
According to one report, the number of consumer bankruptcies being filed is at a low not seen in four years. So far this year, a total of 627,000 bankruptcy filings have been recorded. That is 154,000 less than the number recorded over the same period of time, in 2010.
Of course, this is not to say that individuals are not still turning to Chapter 13 and Chapter 7 bankruptcy as a way to resolve their financial difficulties. The majority of those who choose this route usually do so after one or more of the following reasons make it impossible to make payments on the debt owed:
- Loss of job
- Serious illness
- Divorce
Regardless of why someone is facing problems paying bills, it is important to recognize that options exist. Most bankruptcy attorneys can determine what they are after analyzing the circumstances.
Source: Boston Globe, “Bankruptcies wane as US relearns how to save,” Todd Wallack, Aug. 18, 2012
- Our South Florida law firm handles matters relating to financial difficulties, including consumer bankruptcies. Please visit our Miami Chapter 7 page if you would like to learn more.