Despite all of the upheaval in the last couple of years, personal bankruptcies have been on the decline. In fact, personal bankruptcies fell almost 30% in 2020 from the year before.
Unfortunately, that may soon change. Industry professionals are predicting that there may be a sharp rise in the number of new bankruptcies in 2022.
What’s likely to drive the increase in bankruptcies?
Several factors may be in play. Government relief programs over the last two years and the eviction moratorium that was in place helped keep people financially afloat despite disruptions in their work activity. Plus, the Consumer Financial Protection Bureau (CFPB) set temporary rules that slowed down foreclosures.
None of that is going to last forever. In 2022, the temporary rules CFPB put in place regarding foreclosures are set to end, and they probably will. No more relief checks are likely to be sent to consumers either. For individuals and families who have been struggling financially, the time they have to regain their financial footing may soon run out.
Ultimately, that may leave many consumers checking into their debt relief options. Those with few assets and little income may want to explore Chapter 7 bankruptcy, while homeowners who want a chance to reaffirm their mortgage and retain their houses may want to consider Chapter 13.
If you think bankruptcy is a real possibility for you in the future, learning more about what would be best for your situation may help ease your anxiety and stress over the predicament that you’re in. Experienced legal guidance can help you make informed decisions.