Why Have the Number of Bankruptcy Filings Gone Down a Bit From Last Year?
1. Banks have tightened their lending rules for the last two years. For years, banks doled out credit cards like beer nuts to consumers. It used to be that that banks almost provided credit cards on demand without any regard for the consumer’s ability to pay. However, with banks tightening credit, there are simply fewer credit card accounts in default that would require a bankruptcy filing.
2. As a result of the recession, debtors are simply spending less. A recent poll revealed that consumers were spending significantly less per month in stores than they were previously. As a result, they may be charging less and getting into less debt.
3. Many victims of the current recession have already filed for bankruptcy relief in the past two years. During this time, there were about three million bankruptcy filings.
4. Many debtors who have really hit bottom are having difficulty coming up with the cash to pay their bankruptcy legal fees and filing: Most firms are demanding all attorney and filing fees up front prior to filing. Northwest Debt Relief Law Firm is likely the sole exception to that rule.
5. For the better part of the past year, many mortgage lenders halted their foreclosures due to widespread challenges to the validity of their internal processes. Most lenders will be beginning these foreclosures anew in the coming year.
6. Under bankruptcy code, a consumer must wait eight years from the date of a previous Chapter 7 filing before being eligible to file for Chapter 7 relief again. An enormous number of bankruptcies were filed in 2005 in anticipation of changes to the bankruptcy code. There was also a large rush on filing in the later part of the last decade. Unfortunately, many of these past Chapter 7 filers are aware of how much better off they would be filing a Chapter 13 bankruptcy rather than waiting until they become Chapter 7 eligible again.