Many people lost their jobs last year. With job loss being one of the principal reasons people need to file for bankruptcy, it seems counterintuitive that the number of people filing for personal bankruptcy would decrease. Yet this is what United States Courts figures show.
Personal bankruptcy filings dropped to their lowest rate in 35 years in 2020, falling almost a third from 2019. The report clarifies the figures do not mean people did not need to file but that difficulties in accessing the courts prevented them from doing so. This year and the next few years may well see a significant rise in filings.
Financial institutions want you to believe that people who file for bankruptcy were frivolous with their money. Yet you could argue they are the ones being frivolous with money. The 2008 recession was mainly due to banks lending without due caution. Enticing people into debt is one of the main ways banks make money.
Most bankruptcy is due to unexpected events
Medical expenses, divorce and job loss, are the top three reasons people need to file for bankruptcy. No one plans to get ill or injured, no one plans for their marriage to fall apart, and no one plans to lose their job. They are things that could happen to anyone, and if you are not lucky enough to have money stashed aside, you too could end up being unable to repay the debts that lenders encouraged you to get into.
Do not waste time and energy feeling bad about filing for bankruptcy. Accept that you are in a deep hole, and you need help to get out of it. If you think filing could help, it is essential to learn more about the bankruptcy process.