High credit card balances, unemployment rates and bank foreclosures on homes all lead to a high volume of people filing for bankruptcy protection.
Some experts predicted that bankruptcy filings will increase in 2013. Bankruptcy court records reported 520 new petitions in the Eastern and Western Districts of Arkansas in 2013. In addition, this slight but steady increase since January, a number of other factors mean that bankruptcy filings will continue to rise:
- While the unemployment rate in Arkansas showed a slight improvement this March — 7.2 percent, which is just below the 7.3 percent rate from March 2012 — the size of the workforce declined as well as the number of people employed. This shows an overall weakness in the Arkansas economy. When personal income falls, more people just cannot pay their bills, leading to the accumulation of more debt.
- 2013 marks eight years since the Legislature passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. Many consumers who filed for bankruptcy in 2005 may need to file again depending on how they fared during the Great Recession. Bankruptcy laws require filers to wait eight years between Chapter 7 filings.
- Home foreclosure fillings rose by 75 percent in February as compared to those filed in the prior year. Furthermore, nearly 800 homeowners who are more than 90 days delinquent on their mortgage payments could face foreclosure proceedings in the coming months. In many cases, these homeowners can stop foreclosure and other collection activity by creditors by filing for bankruptcy — particularly Chapter 13.
Bankruptcy offers consumers the opportunity to either eliminate or reorganize their debts. If you are considering filing for bankruptcy, you should consult our experienced Arkansas bankruptcy attorneys to explore your options.