In the first six months of 2023, bankruptcy filings increased dramatically in the first six months when compared to the same period in 2022.
Chapter 11 bankruptcies, a form of bankruptcy that involves the reorganization of a debtor’s business affairs, debts, and assets, surged nearly 70 percent with filings for small businesses at 55%.
Chapter 13 bankruptcies, a type of bankruptcy where individuals, married couples, self-employed or incorporated business can reorganize debt into a repayment plan of 3 to 5 years, went up nearly 25 percent in the first half of the year.
Overall, there were 200,000 bankruptcy filings in the first 6 months of 2023, up 17% from roughly 185,000 filings during the same period last year. Experts believe the number will continue to rise.
- Rising interest rates, inflation, increased borrowing costs on top of debt have pushed both business and families into insolvency.
- Many more Americans are leaning on their credit cards to make ends meet, with consumer debt at history high levels.
- Some are facing the foreclosure of their homes with few options to refinance due to higher interest rates.
- Small businesses are grappling with higher borrowing costs and many have difficulty obtaining financing.
- Commercial real estate suffered during and after the pandemic, with many business giving up office space due to closures or employees working from home.
Fortunately, bankruptcy protection offers individuals, families, and businesses a way to gain their financial footing. Many are able to restructure debt into an affordable repayment plan while retaining their assets. It is important to discuss the best financial strategy with an experienced bankruptcy attorney as soon as possible to gain an understanding of the process – how to qualify; what property exemptions are available; your rights when it comes to creditors and more. Contact Peoria bankruptcy lawyer Charles E. Covey for help at 309-674-8125.