Why More People May Be Filing Bankruptcy in 2024
As we enter a new year, our Memphis bankruptcy firm is looking at rising trends. And according to many economists, we may see a rise in the rate of filing bankruptcy in 2024.
At the same time, the economy has grown since COVID and consumer spending is up. So what might cause this rise in bankruptcy filings, and what does it mean for you?
Why Bankruptcy Filings Are on the Rise: National Factors
Any time we see a rise in bankruptcy trends, you can assume a variety of factors causes it.
For example, right after the government ended its COVID regulations, foreclosure became a real threat again. As a result, Chapter 13 bankruptcies rose across the country.
But the higher bankruptcy rate was also related to other COVID issues, like medical debt and job loss. And some people had already been struggling with debt before COVID, but put off dealing with it during the pandemic.
We saw this every day in our office: you can’t assume one thing explains the rise.
Here are just some of the factors that may affect the bankruptcy rate in 2024:
- Inflation. While some costs have gone down in recent months, others remain high while wages remain relatively stagnant.
- Interest rates. With higher interest rates to cut down on inflation, more people may struggle to make payments.
- Sluggish retail/rise in corporate bankruptcies. As we recently wrote, when corporations go under, it can cause a ripple effect for entire industries.
- Record-low inventory for homes. If you can’t afford your home or got behind on your payments, you could try to sell and downsize. But these days, there isn’t always enough available housing to move.
International Instability and the Rise of Personal Bankruptcy
While it may not be obvious to most people considering bankruptcy, international events can seriously affect our personal finances.
For example, unrest in Europe and the Middle East can impact supply chains for everything from grains to gas. And when the government and public is deeply concerned with international events, it can detract from our ability to focus on our own economy.
In addition, the rise of war and political instability tends to cause rapid inflation – regionally first, and then worldwide. So while we already had terrible post-pandemic inflation, battles abroad may only make it worse.
Bankruptcy Filings for Personal Reasons
But none of the above issues take away from the deeply personal nature of bankruptcy. After all, no one comes into our office complaining about the Federal Reserve or battles in the Middle East – even if both seriously affect our economy.
No, they’re coming in because of the very real ways these issues trickle down into our homes: credit card debt, medical bills, foreclosure, wage garnishment, and the chance for a fresh start.
When our personal economies suffer, it has an enormous impact on our daily lives and the lives of our loved ones. For instance, if you lose your home in foreclosure, you can also lose your child’s school district.
These are the things that keep most of our clients up at night – and while I always try to stay abreast of the trends, my job is to help with the most personal parts of getting out of debt.
Filing Bankruptcy in 2024? We Can Help
The decision to file bankruptcy may be difficult, and the causes may be complicated, but the process is simple.
Our Memphis bankruptcy firm offers a free consultation to discuss your situation and let you know your options. We take care of you every step of the way and never charge you for additional work or questions that might come up.
In fact, our award-winning team has become known across the Mid-South for how much we care about people. We’ll work tirelessly for you and help you get the fresh start you need this year.
To get started, just call us at 901-327-2100 or fill out the form on this page. We look forward to helping you.