BANKRUPTCY PREDICTIONS FOR 2017: TIPPING POINT FOR CONSUMER CREDIT COMING SOON?
Each year our office looks at the coming trends for consumer bankruptcy to figure out if bankruptcy filings are on the rise of will continue to fall. Recently, our office and some of the latest National figures show a modest increase in filings for the end of 2016 and start of 2017.
Based on my past research in this area, bankruptcy filings are tied closely to the level of consumer debt. When that level become too high, payments for households become unsustainable and defaults begin to occur. That then leads to the rise in consumer filings. This is exactly what we saw in the 2007 time period. Revolving debt and house expense became more than families could afford and the housing market collapsed, taking jobs, banks and anything else connected to the housing market down.
For 2017 some of the same trends appear to be back as in 2007. According to the article below:
consumer revolving debt (think credit cards) increased at the fastest rate since 2007. The rate was up over 6% from the year prior. This follows a 5% increase in 2015 and 4% in 2014. So, 15% in the last three years. Secured loans for vehicles and student loan levels also continued to increase, although slower than prior years.
Based on the above, for 2017 it appears that we will continue to see moderate increases in bankruptcy filing numbers compared to the steep drops that have happened in the last few years. If debt levels continue to rise then expect to see sharper increases in bankruptcy filings over the next couple of years.
As an aside, to see some of the causes of rising debt levels check out this article and the cost of being an American consumer as compared to income growth:
At Mickler & Mickler, we attend Court and see the bankruptcy trustees and judges in action several times a week. We have the experience to guide you to the right decision about whether to file a case, and if so, what Chapter to file. When you contact our office, we can help you in your case with sound legal advice.
Please contact Mickler & Mickler at 904.725.0822 or firstname.lastname@example.org. We will be happy to set you up a free appointment to discuss your situation and potential solutions.