Today’s state of the economy worldwide can be summed up as “volatile”, to say the least. The market fluctuates almost frantically and finances oscillate seismographically, leading to trends changing on a virtually daily basis. As an integral part of the economic landscape, bankruptcy is subject to these alterations, too.
The main question here is “How?”. Are things changing for the better or worse? Are the same demographics still at risk of financial struggle? And, finally, will any bankruptcy lawyer in Poway (or anywhere else in the US) not have to help so many people? Let’s find out!
How has the number of bankruptcy filings changed since 2022?
Now that we’re well past the first quarter of 2023 and we’ve set the stage with the current state of affairs with Part 1 of this breakdown, we can do a more comprehensive comparative analysis of the state of bankruptcy in the US.
According to EPIQ, between March 2022 and March 2023, the total number of new filings saw a 17% increase (36,068 compared to 42,368). These numbers amount to both individual and commercial filings, as follows:
- Individual filings: 17% increase (34, 214 compared to 40,063);
- Chapter 7 filings: 13% increase (21,594 compared to 24,476);
- Chapter 13 filings: 24% increase (12,532 compared to 15,537).
- Commercial filings (Chapter 11 and Subchapter V): 79% increase (306 compared to 548).
- Year-over-year commercial filings: 24% increase (1,854 compared to 2,305).
Although the above data may indicate a downward spiral, the fact is that the bankruptcy filing trends are at an all-time low. The spike in filings is consistent with the remnants of the Coronavirus’ impact on the global economy, as well as current instabilities. Fortunately, the silver lining is that projections show further decline in filing trends leading into 2024 and continual economic stabilization in both commercial and non-commercial sectors.
Which demographic groups are more likely to file for bankruptcy?
Demography always played a crucial role in economic landscaping, and bankruptcy trends aren’t exempt from that rule. Here’s the breakdown of demographic features, according to the American Bankruptcy Institute (ABI):
- Age: Average age of a bankruptcy filer in the US is 40.9 years.
- Most filings are done by individuals aged 25-44;
- Individuals aged 18-24 file at less than one-half of the expected rate;
- Individuals aged 60+ file at less than one-third of the expected rate.
- Gender: Men-to-women filing rates stand at 48%-52%, with that gap showing significant signs of shrinking;
- Marital status: Married individuals and those in domestic relationships are the majority filers, making up more than 48% of the total number. The rest are comprised of single individuals (including divorcees/widowers):
- ~15% single men;
- ~37% single women.
- Education: Financial burden of student laws makes individuals with some college education most susceptible to bankruptcy:
- 20% have bachelor’s degrees;
- 36% have high-school education;
- 29% have some college education.
- Income: 60% of bankruptcy filers have salaries lower than $30,000.
What are the most common causes of bankruptcy in the US?
According to a study conducted in 2019, medical expenses (including expenses not covered by insurance and medical-related job loss) are the leading cause of bankruptcy in the US, comprising a head-spinning 78% of all filed cases. The remaining causes are (in order):
- Reduced income/Job loss (due to non-medical related factors);
- Unsustainable mortgage/foreclosure;
- Credit Card Debt (due to uncontrolled spending/living beyond means);
- Student loans (due to the lack of the higher salaries associated with college degrees);
- Divorce;
- Helping friends/relatives.
Who is the leading bankruptcy lawyer in Poway & near me?
Whether you’re preparing to file for bankruptcy, or simply wondering if filing is the right step to take, having expert guidance will ensure that you make all the right decisions. And in the area surrounding Lake Poway, there’s no one better to guide you than The Bankruptcy Lawyers.
Our professionals have extensive experience and knowledge of the bankruptcy filing process and all its intricacies. We’re wholeheartedly committed to your well-being and ready to fight so you can realize your legal rights. Reach out to us today and start your journey of financial recovery!