Tough economic conditions have sent personal and business bankruptcy filings in an upward trend for the last few years. However, over the last few months reports show that both types of bankruptcies are decreasing to pre-recession levels.
Good News Brings Hope
Although bankruptcy is not to be looked at as a negative thing, the truth is that when filings increase it is often a sign of a struggling economy, housing market or lending industry. High interest rates, overwhelming debts and job loss are all common factors that coincide with bankruptcy filings. The good news is that all of these aspects are beginning to turn around, which comes as great news for anyone struggling to stay afloat.
Small businesses have been particularly susceptible to financial problems in recent years, as loans to sustain operations are virtually non-existent and consumer spending is far from what it needs to be. Fortunately, it seems as though small businesses are doing better and becoming stronger in the fight against debt. Equifax’s Small Business Bankruptcy report says that small business bankruptcy filings have continued a decline by nearly 17% in the second quarter, making it the fourth straight quarter to show a decline. The report attributes better lending opportunities and increased cash flow as the main contributors to the decline, two vital aspects of successful business operations.