Financial challenges are nothing new for residents of Washington State. In the past year, however, there has been a radically different landscape with the ongoing national crisis resulting in job loss, medical expenses and more. People might have staved off their creditors with stimulus payments and unemployment benefits, but eventually the strain becomes too much and alternatives must be sought. In recent months, there has been a spike in bankruptcy filings that is expected to continue. Those considering this option should be aware of the facts.
Bankruptcies remain steady with more than 40K in back-to-back months
As society slowly starts to return to relative normalcy, a growing segment of people are realizing that they cannot pay their debts and are moving forward with bankruptcy. That has resulted in a steady stream of filings for March and April. In March, there were 41,156 overall filings. That includes not just personal bankruptcy through Chapter 7 and Chapter 13, but business filings with Chapter 11. In April, there were 40,886 filings. Over seven months, that is a spike of 16%. The largest portion of bankruptcies were individual and non-commercial cases with 38,813. Analysts from Epiq AACER – the information service that compiled the statistics – says that this indicates that the number of filings is returning to what it was prior to the national crisis.
Bankruptcy can be beneficial to a stable financial future
Many might be reluctant to consider bankruptcy due to preconceived notions about it. In truth, Chapter 7 or Chapter 13 can help to get into a better financial situation. With a Chapter 7 liquidation, unsecured debts can be cleared meaning credit cards and medical debt might be eliminated. There are even properties that can be retained provided they are below a certain value. Chapter 13 is a payment plan that is like a consolidation loan repaid with disposable income over three or five years. People can keep their home, automobiles and other properties.
Advice is key to determining if bankruptcy is the preferable alternative
In addition to clearing various debts, bankruptcy can also put a stop to harassing phone calls and the endless stress that often accompanies being buried in debt. Regardless of how the debt was accumulated, there are viable pathways to improve the situation. To understand the process and take the necessary steps to file for bankruptcy, having professional assistance is vital from the start.