Anyone who has been paying attention to financial news lately has heard that the economy is improving, resulting in a much needed reprieve for many Ohio residents and businesses who have been facing monumental financial struggles in recent years. Perhaps one promising economic indicator is the nationwide reduction in yearly bankruptcy filings.
Published numbers from the Bankruptcy Court for the Northern District of Ohio recently showed a 12 percent reduction in cases filed in 2014 over 2013. Similarly, there was also a 12 percent drop in bankruptcy filings the year before.
However, some bankruptcy experts contend that these reductions may not actually be a sign that things are improving for the average consumer. They say that fewer people are filing for bankruptcy because they have been unable to get access to credit over the past several years and not because they are better able to pay off their debts.
Since the financial meltdown, it has become much harder for people to obtain mortgages, loans and credit cards. Those people who have already filed for bankruptcy more than eight years ago, and would be eligible to do so again, simply have not accumulated much debt. People have had less income and, therefore, less ability to dig themselves into a financial hole.
Experts say that an improvement in the economy would actually bring more bankruptcy filings because consumers would once again be able to get themselves into more debt.
However, there are still many Ohio residents who are facing financial challenges and having trouble paying their monthly bills due to unexpected life changes, medical expenses loss of employment. For those people, Chapter 7 or Chapter 13 may be the right option. For them, seeking the advice of an experienced bankruptcy attorney may be a good first step to obtaining a fresh financial start.
Source: The Blade, “Local bankruptcy filings decline for 5th year: Toledo’s federal court sees 12% drop in cases,” Jon Chavez, Jan. 3, 2015