According to recent reports, low interest rates and consumer spending are predicted to continue influencing a decline in bankruptcy filings. As per data from the American Bankruptcy Institute and Epiq Systems Inc, the total bankruptcy filings in the United States of America decreased by 15% in May, 2014 over the same time in 2013. In May, 2014, the total bankruptcy filings totalled to 85,667, which were down from May 2013, a total of 96,497. Consumer filings declined 11% to 82,774 from May 2013 when consumer filings totalled to 92,440.
On the other hand, total number of commercial filings in May 2014 decreased to 3190, thereby representing a 21% decline from the 4055 business filings that were recorded in May, 2013. The total number of commercial Chapter 11 filings dipped by 22% to 429 filings in May 2014 from the 540 commercial Chapter 11 filings registered in May 2013. Hence, we can clearly see that bankruptcy filings continue to nose dive in the present market environment of sustained low interest rates for business borrowers and lower than expected consumer spending. Experts and financial analysts are of the opinion that if these conditions continue to persist, the bankruptcy filings within the nation will also keep decreasing. In fact, as per reports, the average total filings per day in May 2014 were 2,763, an 11% decrease from 3113 total daily filings in May, 2013.
Smart ways to dodge filing bankruptcy – Exploring the alternatives
While unanticipated medical bills or a sudden loss of job can force almost anyone into a rather uncomfortable financial, more often than not people facing bankruptcy are in that situation only due to their poor spending habits accompanied with poor savings habits. Have a look at the strategies that you can adopt in order to avoid the pangs of filing bankruptcy.
- Cut down expenses: The first stage of avoiding bankruptcy is to figure out how much money you spend each month. We all know that arranging a budget is the best and the easiest way of getting a grip on your spending habits but in spite of knowing this, how many of us follow it? Once you know how much you spend in a month, you have to take vital steps towards curbing down your expenses. Cut down your credit cards immediately as that is the main source of financial imbalance. Check the areas where you’re overspending and this way you can trim down what you spend.
- Cut back on your credit cards: If you ever have to file bankruptcy, the main and the only reason would be the reckless use of your credit cards. Credit cards seem to be a blessing for our society as it allows us to purchase things without the need for cash but at the same time when you start misusing it, it becomes nothing but a nasty little debt generator. So, your next step would be to cut back on your credit cards. You can even take this tip in the literal sense, and cut your credit cards with the help of scissors. Unless you do that, you can never be able to resist yourself to the temptation of using your cards. Fill your wallet with cash and forget impulsive shopping for the time-being.
- Adopt frugal living: Many people think that frugal living deals with denying yourself of the luxuries of life and living by scrimping. But this is not the fact. Frugal living is indeed good when it comes to saving money and avoiding the ultimate debt relief option, bankruptcy. There are many unnecessary expenses that we usually tend to overlook and these are the ways in which we waste our dollars. If you visit the spa every month, stop doing so and try some DIY methods to stay beautiful. If you have subscribed to monthly magazines but you hardly find time to read them, you can cancel your subscription and save money. Rule out the option of eating out as this can also help you save your dollars. Cancel gym subscriptions and try out DIY methods to stay fit.
- Get professional help: When you’re in financial trouble, turning to experts for their helping hand can always be a good idea but those who are in need can usually fall prey to unscrupulous operators during this time. You will find companies with the basic sales pitch that says “pay me a fee and get a quick fix to your debt situation” but most of them are too good to be true. Before you take this turn, consider getting help of the debt consolidation companies or the credit counseling agencies as they can help you with an alternative way of dealing with your debts.
So, when you’re financially poor due to the huge bills that you’ve paid your credit card companies, take the above mentioned steps. Bankruptcy has a dampening effect on your credit score and so it is best to avoid it. Only when no option works in your favour, take resort to the inevitable but only after consulting an attorney.