Legal Advice During Challenging Times

Bankruptcies could be on the rise in 2022

On Behalf of | Feb 1, 2022 | Bankruptcy |

If you’re struggling with money and don’t know how you’re going to pay back your debts, you’re not alone. There are many Americans in the same position, and attorneys who specialize in bankruptcy believe that filings for bankruptcy due to excessive debt will rise in 2022.

When people lose their jobs, have to deal with a poor economy and are forced to pay more for goods, the entire economy is disrupted. Individuals on tight budgets may find that they can no longer afford what they could the month or two before. Then, they could start to fall behind.

Why will bankruptcies be on the rise in 2022?

The reason that bankruptcies could increase is not a result of a single problem. A struggling economy, illnesses and medical debt, problems paying mortgages on time because of those debts and other issues are all adding up to what may be a year of many bankruptcies.

According to one attorney, the end of the eviction moratorium forced the Consumer Financial Protection Bureau to take steps to curb foreclosures in the U.S. Those may not be extended permanently, so at some point, people may find themselves struggling with the risk of foreclosure again. To get out of foreclosure, they may then file for Chapter 7 or 13 bankruptcy.

Why do people file for bankruptcy?

Some of the most common reasons include:

  • Losing a job
  • Having medical debt for the death of a loved one
  • Having personal medical debt for an emergency
  • Divorce

Bankruptcy can be a helpful solution for some people, especially when they are struggling with unsecured debts like credit card debt. However, it may not be a complete solution for issues with a long-overdue mortgage or student loan debt, which may still bog down some people.

What should you do if you’re struggling with debt?

It’s most important for you to know your options. There are different kinds of bankruptcy as well as debt relief options that you should learn about before deciding which steps to take to get out of debt. There are different ways to resolve debt, so you need to find out more about which may be right for your situation.