Those unable to deal with their financial situation or debts may seek protection in federal bankruptcy court. People file for bankruptcy every year, so the proceedings are nothing out of the ordinary. However, predictions suggest Illinois courtrooms will see more people file for bankruptcy in 2022. Economic conditions and other factors may drive an upswing in unavoidable bankruptcy filings.
2022 and consumer bankruptcies
Bankruptcy might not be someone’s first strategy for dealing with debt, but attempts to pay obligations could hit a proverbial roadblock, and dealing with collection actions may become both stressful and unavoidable. In 2022, expectations are that more people will file for bankruptcy due to economic factors.
Many prices have increased due to inflation, with fuel prices driving up the costs of driving a car or heating a home. Persons struggling to pay debts likely need extra funds to cover their balances. Less money could mean missed payments or the inability to pay for essentials. Filing for consumer bankruptcy may provide a solution to a challenging situation.
Bankruptcy and financial management
Even when the national economy does well, someone might suffer from a life event that drives them into consumer bankruptcy. Job losses, divorces, and medical emergencies are among those causes. Some persons suffer from more than one significant event in the same year, driving a debt situation to untenable levels.
Filing for bankruptcy could protect a debtor from aggressive collection action while setting a course for renewed financial freedom. Chapter 13 revolves around a payment plan, whereas Chapter 7 focuses on liquidation. Be mindful that filers must pass a means test for Chapter 7.
2022 may be an active year for the bankruptcy courts where people take steps to get control of their financial situation. A fresh start may lead to living life on a better fiscal footing from that point forward.