Consumer Bankruptcy Filings Hit 10-Year Low
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While final figures are not yet available for 2016, federal bankruptcy court records show that personal bankruptcies reached the lowest level since 2006, before the beginning of the recession.
Fewer personal bankruptcies were filed in 2016 than any year in the last decade, but monthly filings were up from the previous year. During December 2016, a total of 56,394 commercial and personal bankruptcy cases were filed in bankruptcy courts, up from 53,844 in December 2015.
Every year, about 1.5 million people file for bankruptcy across the United States. Almost 97% of bankruptcy filings are by individuals, not businesses.
Medical debt continues to lead as the number one cause of bankruptcy. According to a recent Harvard University study, about 62% of personal bankruptcies in the U.S. are attributed to medical expenses. The study also found that 72% of people who file for bankruptcy for medical expenses had health insurance of some type, which means financial disaster can befall people even when they are insured due to the high cost of prescriptions, medical procedures, co-pays, and deductibles.
Other leading causes of bankruptcy in California include:
– Reduced income
– Job loss
– Credit card debt. More than 11 million people take on extra credit card debt to cover medical expenses.
– Unexpected expenses such as emergency home repairs
– Student loans, which account for about 1% or 15,000 bankruptcies per year
If you are struggling with debt, bankruptcy may be a good option for you. An experienced Los Angeles bankruptcy lawyer can help you understand your options and how bankruptcy may affect your assets. Contact the Law Office of Tawni Takagi for a free consultation with a bankruptcy attorney.