Various economic factors may contribute to bankruptcy filings. If the economy takes a downturn a particular year, the number of bankruptcies might increase. However, challenging economic times might not always result in increased bankruptcy filings. And the challenges could be disproportionate as Pennsylvania could experience economic growth while other states do not. While each situation varies, 2021 appeared to be a year when bankruptcies experienced a decline.
Bankruptcy filings for 2021
Bankruptcy statistics for 2021 appear to reflect positive news, at least on the surface. December saw a decrease in filings from November, as the 27,957 filings reflected a 4.7% decline from the previous month. 2021’s overall filings of 401,398 filings reflected a 24.2% decrease from 2020.
Overall, the data would appear to indicate positive news, but the numbers might not reflect the overall picture. For example, December filings may drop due to the holidays, and mid-January 2022 might see an increase.
Individual bankruptcy situations
Although the bankruptcy figures may be lower in 2021 than 2020, such information means little to those who did file. Someone currently struggling with excessive debt might not worry much about others in the same position. Instead, the debtor might look for ways to deal with their current plight.
Anyone considering filing for bankruptcy likely has tremendous debts that a current financial situation cannot cover. A person struggling with reduced income or a job loss might find medical and credit card debt too much to pay. So, filing for bankruptcy might become the only available option.
Individuals may seek Chapter 7 liquidation bankruptcy protection. Those who do not pass the means test might enter into a Chapter 13 payment plan arrangement. Both options could have value to those struggling financially.