There have been some big bankruptcies in the news lately, from Dean Foods (the nation’s largest producer of dairy milk) to luxury New York retailers, like Barney’s. However, there are plenty of other bankruptcies in the works, as well — although they get a lot less fanfare because they involve many ordinary people who simply have extraordinary debts.
During the Great Recession of 2007-2009, consumer bankruptcies were at an all-time high. They dropped off sharply again once the economy and housing industry began to recover. Personal bankruptcy petitions have still not hit that extreme — but the experts say the nation may need to brace for another round soon if the omens prove true.
Personal bankruptcies in big cities are on the climb — indicating that inflation and ordinary living expenses are eclipsing earning power for many in these areas. New York, for example, saw an increase in the number of personal bankruptcies being filed for three years running, from 2016 to 2018. Even with unemployment being low, ordinary people are struggling to make ends meet. People with full-time jobs are turning to food banks and letting some of their debts slide because they simply can’t survive any other way.
The debt problems facing American companies are also likely to have a ricochet effect in consumer households. As more large employers file bankruptcy and either restructure or close, that will affect countless American workers who may lose the ability to pay their debts.
If you’re beginning to crumble under the weight of the credit card debt, doctors’ bills and other financial burdens you’re carrying, there may be options you’re overlooking. Bankruptcy is a tool that is designed to help people just like you. Find out more to learn if this path is right for you.