Wednesday, 3 September 2014

Bankruptcy Filings Decline In The US – Are More Consumers Becoming Aware?

Posted at  09:24  |  in  Bankruptcy

According to reports by the American Bankruptcy Institute and data from Epiq Systems, the total number of bankruptcy filings in the United States decreased by 13% in the month of April, 2014, as compared to the same month last year. In April 2014, the bankruptcy filings totaled to 87,954 down from 2013 April, a total of 100,770. Consumer bankruptcy filings also declined by 12% to 84,579 from April 2013 that saw a total of 96,357.

Apart from the consumer filings in 2014, there has also been a significant decline in the total number of commercial bankruptcy filings. As per reports by the American Bankruptcy Institute, total commercial filings in April, 2014 decreased to 3375, thereby indicating a 24% decline, from 4415 business bankruptcy filings recorded in the month of April, 2013. On the other hand, the total number of commercial chapter 11 bankruptcy filings dipped by 4% to 683 filings in April, 2014 from 711 Chapter 11 bankruptcy filings in the month of April, 2013. Continuous low interest rates for the business borrowers, sluggish consumer spending and huge costs associated with filing bankruptcy have played a role in keeping the filing rates below the normal level.

Behavior of consumers that has led to the declining bankruptcy level

You must be wondering about the possible reasons behind the above mentioned statistics? What might be the reason that there is such a huge decline in both consumer and commercial bankruptcy rates? Have a look at some possible reasons.

  • Consumers value their dollars: Yes, most Americans didn’t know the actual value of a dollar and this was the main reason behind the way they splurged in the unnecessary things. But now after going through bankruptcies and harassment from debt collectors and creditors, they know what it means to go through such a process. They now know how to take care of their dollars. Now they think twice before spending on unnecessary things.
  • Consumers follow a budget: Americans have always had a love-hate relationship with a budget. They think that following a budget means embracing a non-luxurious life. But this is not the fact. May be the thousands of budgeting articles on Google have been able to change their age-old notion. Now they systematically follow a budget, list down their expenses and also try their best to live within their means. This way they’re being able to save money too.
  • Consumers don’t hesitate getting help: There was a time when consumers who fell in debt hesitated to seek help of professionals as they felt shy about discussing their finances with someone unknown. But time has changed now. Now they can seek help of the credit counselors and the debt consolidators who can speak to them about the alternatives to bankruptcy.
Hence, these may be the above mentioned reasons for the declined bankruptcy levels in the US. This is indeed a good sign for the economy and should continue to remain so. If you’re someone who is on the verge of losing control on your finances, get immediate help from the financial advisors and avoid walking on the path of bankruptcy.

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Jimmy Simond is founder of wallstreetsfinancenews.com he share his immense knowledge of finance in this blog. You can follow him on Google+.

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