A Change In Bankruptcy Trends
Over the years, bankruptcy statistics have shown to be quite variable. A decrease in filings was observed following the change in bankruptcy laws in 2005, but began inching back up again since the recession. Interestingly, bankruptcy filings have been considerably lower this year than in the past few years, indicating that a change in the debt burdens of Americans is happening.
Is Change Good?
While most people would agree that a change in bankruptcy trends suggests good things for the economic recovery, a further review may suggest otherwise. According to a report from the Albuquerque Journal, the amount of debts claimed in bankruptcy filings this year decreased. In New Mexico alone, the total amount of consumer debt dropped by 25 percent for state-wide bankruptcy filings. Consumer assets was also reported to have dropped, by 23 percent.
Filing for bankruptcy with less debt is good, right? If you consider the fact that less debt is an indication of less spending ability or tarnished credit leading to the inability to secure credit, then the answer is ‘No’. Many are saying that the reduced debts, along with reduced assets, in bankruptcy filings simply means people aren’t spending as much because they aren’t making as much. Further, many people’s largest asset, their home, is suffering in value; dragging down their overall worth in assets.