The number of bankruptcy filings across the U.S. are on the rise. Common reasons that people file for bankruptcy include loss of income, medical bills, a mortgage payment that is too high, spending beyond their means, or lending money to loved ones.
Many times, it is not just one simple cause, but rather a combination of factors that contribute to why someone has filed for bankruptcy. Here are some common reasons people file bankruptcy.
With federal pandemic aid programs ending, many Americans are finding themselves in difficult financial situations. Rising interest rates and high inflation make these situations all that much worse. As a result, bankruptcy courts are now seeing a spike in bankruptcy filings.
According to data from Epiq, the total number of bankruptcy filings increased in January 2023 by 19 percent, to 31,087 filings from one year ago. Additionally, the number of American consumers who filed for bankruptcy in Chapters 7, 11, and 13 increased by 20 percent from one year ago.
Millions of debt collections disappeared from American consumers’ credit reports during the COVID-19 pandemic, according to reports from the Consumer Financial Protection Bureau (CFPB). Even though a large number of collections cases dropped off credit reports, overdue medical debt still remains a major consumer problem.
According to the CFPB, the total number of debt collection cases on consumer credit reports went from 261 million in 2018 to 175 million in 2022, dropping 33 percent (33%). Additionally, the number of consumers who had a debt collection on their credit report decreased by 20 percent (20%) between 2018 and 2022.
Will filing for bankruptcy cause me to lose my car? The fear of losing everything is a very real fear for many bankruptcy filers. However, this is one of the most common bankruptcy myths, and can keep individuals who are drowning financially from filing for bankruptcy. One concern many filers have is, what will happen to my car during bankruptcy?
The good news is most filers will be able to keep their vehicles after filing for bankruptcy. Florida bankruptcy laws offer generous exemptions which allow individuals to keep various types of property, including their vehicle. Under the Florida Motor Vehicle Exemption, bankruptcy filers can exempt up to $1,000 in motor vehicle equity. This amount can be even more if a married couple is filing for bankruptcy jointly.
The U.S. Supreme Court will be hearing arguments this week over two legal challenges brought against President Biden’s student loan forgiveness plan. The decision from these challenges could make or break Biden’s overall plan for loan forgiveness, affecting tens of millions of American borrowers.
Since President Biden made his initial announcement regarding his loan forgiveness plan, his policy has faced six legal challenges. The two challenges before the high court now have consolidated these suits. One legal challenge has been brought by six states, including Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. The other challenge has been backed by the Job Creators Network Foundation, a conservative-based advocacy group.
For many people with federal student loan debt, it has been approximately three years since they were obligated to make a payment on their loans. The pause on these payments started at the beginning of the COVID-19 pandemic and has continued since then, eight separate times.
Another extension has been issued for this pause on payments after legal challenges were made regarding President Biden’s widespread student loan forgiveness program originally announced in August. To help borrowers who were anticipating help from this forgiveness, the government announced student loan debt bills from the federal government will not be collected formally for months.
More consumers are racking up credit card debt at a pace not seen in decades as interest rates rise and inflation continues to pervade the economy. Many consumers in South Florida are struggling to manage this debt and as a result are in a vicious cycle that they cannot seem to escape.
Total credit card debt was on the rise towards the end of 2022. According to TransUnion, the average credit card user carried a balance of $5,805 over the last three months of 2022. This number is up 11 percent (11%) from 2021.
U.S. consumer bankruptcy filings are on the rise again, across all chapters, according to data recently published by Epiq Bankruptcy. This increase in filings represents a change in the trend previously seen with new bankruptcy cases, as numbers have been on the decline since the start of the COVID-19 pandemic.
According to Epiq, the total number of commercial bankruptcy filings increased by twelve percent (12%) in January. In January 2023, 1,694 new commercial bankruptcy cases were filed, as compared to 1,508 filed in January 2022.
MIAMI – (January 31, 2023) Managing Shareholder, Timothy S. Kingcade of the Miami-based bankruptcy law firm of Kingcade Garcia McMaken has received the 2023 AVVO Clients’ Choice Award. To obtain this award, an attorney must receive five or more exceptional client reviews in the same year. Kingcade has been awarded the Clients’ Choice Award 10 years in a row.
One of attorney Kingcade’s clients had this to say on AVVO:
The law firm is very much customer focused. In my case, I was referred by a previous client and the procedure to start working with them is easy and painless, they set an appointment and Mr. Kingcade himself interviewed me, precise, concise, and straight to the point. He made everything crystal clear. Then the information phase started, they asked for a list of documents and statements and gave me enough time to collect them all. In the end, the results were stellar. I can recommend Kingcade & Garcia from here to the moon. Excellent service! -J.G.A
Tax debt is one of the few forms of debt that is not always easily erased in a consumer bankruptcy case. While it is true that discharging tax debt can be difficult in a bankruptcy case, it is not impossible. Ultimately, it depends on the type of bankruptcy being pursued and the type of debt involved as to how it is handled.
While a bankruptcy filing normally puts an immediate halt to all collection actions on debt through the automatic stay, tax debt is treated differently.
