The number of Americans who chose to follow the Chapter 7 bankruptcy timeline and Chapter 13 bankruptcy timeline declined by about 12% throughout the first half of 2015.
According to recently-released data from the American Bankruptcy Institute, there were 422,782 bankruptcy filings in total during the first six months of the year. That’s a 12% decrease from the 479,573 bankruptcies filed during the same period in 2014.
If the bankruptcy rate stays consistent through the end of the year, there will have been approximately 846,000 bankruptcies filed in 2015. That’s significantly fewer bankruptcies than in 2013, which saw about 1,071,932 bankruptcies.
As is typical, noncommercial, or consumer, bankruptcies made up the majority of filings throughout the first half of this year, with 407,764 people choosing to file Chapter 7 bankruptcy or Chapter 13 bankruptcy.
This data is a reflection of improvements in the U.S. economy — especially regarding economic conditions for consumers, explained American Bankruptcy Institute Executive Director Samuel J. Gerdano.
“Bankruptcy filings through the first half of the year continue to recede amid sustained low interest rates and flat consumer debt levels,” Gerdano said. “Total bankruptcies remain on a pace to total just over 800,000 for 2015.”
While bankruptcy can be a useful tool for people who have fallen into unexpected financial crisis — for example, 2 million Americans filed bankruptcy in 2013 due to unpaid medical debts — it should be used sparingly. A Chapter 7 bankruptcy filing, for example, will stay on your credit report for 10 years afterward, making it more difficult to get approval for credit and financing during this time.
With fewer people filing bankruptcy, it’s clear that Americans are becoming more responsible with their finances and are more actively repaying their debts.
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