Bankruptcy filings have continued to rise nationwide and it is expected that they may even exceed the numbers of bankruptcies filed right before the 2005 Bankruptcy reform. Below are a few reasons why many analysts believe that the rise of bankruptcy filings won’t be stopped anytime soon:
- The foreclosure crisis is still in full swing. With several failed foreclosure prevention programs under our belt, the number of homeowners facing foreclosure has steadily increased. Many homeowners facing foreclosure are getting wise and hedging their bets with bankruptcy.
- Ironically, the credit crunch is also causing more debtors to file bankruptcy. During the boom times when people found that they couldn’t pay their debts they often “solved” that problem by taking out more debt — equity loans, credit cards and even personal loans could be easily had during our credit granting gold rush before the recession. Now that lenders are becoming more discerning about who they lend to, debtors who would normally solve debt problems with more debt are now being faced to “pay the piper” so to speak and are seeking bankruptcy protection.
- A dragging job market is one of the main culprits causing the rising number of bankruptcies. Job losses are now the leading reason why man debtors say they are seeking bankruptcy protection. Usually a debtor who lost their job would be able to find another job within about 3 to 6 months; but now that millions are remaining unemployed for years many are finding that bankruptcy is their only option when faced with little to no income and mounting debts.