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Bankruptcy rates fall but experts question reasons

As Tennessee readers already know, things have not been easy for consumers in recent years. Fortunately, while things are still tough, some experts believe that the economic tides are beginning to change. In fact, since 2010 consumer bankruptcy rates have been on a steady decline. Consumer bankruptcies in Tennessee dropped from around 50,000 filings in 2009 to just over 40,000 in 2013.

While the decrease in bankruptcies may appear to be a good sign, some experts believe it may have less to do with improved economic health than with people waiting for a more opportune time to file. In fact, according to a Chapter 13 bankruptcy trustee in Nashville, as more people go back to work filings may rise. The reason is that some people might wait to file since they do not have assets to protect when they are unemployed.

Some experts suggest that the drop in bankruptcy filings over the last three years is actually the result of stricter qualifications and an increase in the cost of filing for bankruptcy. In 2004, the year before Congress made it harder to qualify and more expensive to file for bankruptcy, Tennessee had a little over 60,000 filings. But, at the peak of the recession in 2009, Tennessee bankruptcies peaked around 50,000.

While the exact reason for the decline in bankruptcy filing in the U.S. may be difficult to pinpoint, the truth is that hard times can hit anyone at any time. And despite signs of economic improvement, we may still be a long way from the finish line. That is why it is so important for people facing financial challenges to know their options. To do this it is important to speak with a debt relief professional about your unique situation.

Source: WBIR, "Bankruptcy decline could reverse amid better jobs picture," Jamie McGee, January 13, 2014

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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