This article discusses:
- Financial trends heading into 2023, with bankruptcy at the forefront.
- Why bankruptcy filings will likely increase in 2023.
- How moratoriums may prove detrimental long-term.
What Are Some Financial Trends In The U.S. Pertaining To Bankruptcy Heading Into 2023?
We have found that any trend that exists has some connection to inflation. Although inflation has not risen as much lately, it is still rising relative to a few years ago.
Our clients have a more challenging time covering monthly expenses while their rent, the cost of groceries, and insurance policies have dramatically increased.
As a result, their budgets are much more strained than they usually would be, especially since their income has not changed.
We have observed a measurable increase in evictions. Many people were behind on rent, likely due to the pandemic. On top of moratoriums ending some time ago, rent has also gotten very expensive in central Florida and across the nation. Many are told of their rent increase at the last minute possible minute, as they renew their lease.
With that, there is an increase in repossessions. While car payments have not increased, car values are overvalued right now. Lenders are more prone to repossession because they can make money off the sale of the car.
How Is Inflation Expected To Impact Bankruptcy Filings Amidst The Current Economic Climate And A Looming Recession Into 2023?
We forecast an increase in bankruptcy law cases primarily because, even before COVID, filings were not high. There have been fewer filings in the central Florida area so far this year than there were last year, and that was a decrease from the year prior. While this might not be a massive event on the net, it may be at least relative to the past few years. Once the cards tumble, they all will, with many more filing Chapters 7 and 13.
Why Have There Been So Few Bankruptcies?
We believe there are a couple of primary reasons for so few bankruptcy law cases over the last few years.
The several moratoriums that provided relief to many for such a long period play a major part in this. This has also prevented people from seeing how bad the situation has actually gotten. Coming off of this will prove difficult.
Less demonstrable, we believe people have been trying not to file for whatever reason. This is not necessarily bad, but in many situations, many may wish they had filed prior.
With the guidance of a skilled attorney for Bankruptcy Law Cases, you can have the peace of mind that comes with knowing that we’ll make it look easy.