With the strengthening of the economy, federal bankruptcy courts are reporting a decline in bankruptcy filings in 2014, but they are imposing higher bankruptcy filing fees.
US Courts website, the amount of bankruptcy cases has significantly dropped compared to the same period in 2013. In fact, according to creditslips.org, the number of cases is projected to be the lowest since 1995. At the same time, The Judical Conference of the United States has announced new higher filing bankruptcy fees that went into effect on June 1, 2014.— According to data provided on the
Bankruptcy attorneys also report a decline in the amount of bankruptcy cases, but remind that filing for bankruptcy is perceived as humiliating and may be the last resort for a lot of people, and, therefore, the number of cases is not sufficient to make any conclusions about the condition of the economy.
“What I have found after 20 years of running a bankruptcy law firm is that people feel humiliated and ashamed when they discover that bankruptcy is the only solution for their situation,” said Orlando bankruptcy attorney Cliff Geismar. “What they oftentimes don’t understand is that bankruptcy is a fresh start and a dignified solution to their debts.”
According to Geismar, the first step when filing for bankruptcy is to figure out which type of bankruptcy is the most appropriate for the specific solution. Chapter 7 and Chapter 13 bankruptcy are the most popular types and accounted for 777,845 and 348,994 of the total amount of bankruptcy cases across the nation in 2014 respectively.
Moreover, judging from the data from the US Courts, the majority of cases are “non-commercial” cases, meaning that individuals generally account for more bankruptcy cases than businesses. Although the decline in the amount of cases is quite significant, it does not necessarily imply a correlation between a decreasing unemployment rate and a shrinking number of bankruptcy filings.
“To me, bankruptcy is not a lack of steady employment history and income. It is about having debt,” explains Geismar. “Obviously, having a full-time employment and a steady income may significantly lower the chances of bankruptcy, but such unexpected events such as medical crisis, can overwhelm a household and put it into serious debt. I believe that the main factor that is driving the bankruptcy rate down is the lack of household debt. People need to get more educated about the types of debt and bankruptcy itself. Getting more information about bankruptcy process and asking an experienced attorney for advice is always a good idea,” concluded Geismar.
Name: Clifford J. Geismar
Release ID: 63972