As we begin a new year a look back at 2012 reveals some important changes in our nation’s economy. Although still far from a full recession recovery, we have seen continued improvement through the end of 2012. A recent analysis shows that bankruptcy filings dropped by 14.1 percent last year, a indication that even small tides in economic facets are changing.
What Does It Mean?
If we know one thing about data, is that there are clear trends that help to resolve the inherent variability; which are subject to change at any time. Things improve, get worse, stay the same or cycle back through to a new pattern over time. After the changes to the bankruptcy code were made in 2005, a significant drop in filings was observed up until the recession hit in 2008. From 2008 to late 2010, bankruptcy filings were increasing; largely due to families trying to protect homes from foreclosure.
Medical debts, personal credit troubles and threats to secured loan assets have all been better served in bankruptcy for many families over the last few years. However, the decline in bankruptcy filings in recent years does not necessarily mean that these troubles are over. Rather, it points to the ever changing nature of policy change, economic instability, lending practices and consumer confidence; all of which can hold strong influence our financial lives. This isn’t to say that the decline in bankruptcy filings is misleading, but instead should be viewed as a sign that more stability among some of the factors could be ahead for the near future.