At the end of March, the United States Federal Court published figures for bankruptcy filings for the past few years and the findings display a decrease in both business and personal filings over the past few years:
Business and Non-Business Bankruptcy Filings (2014-2016)
2016
2015
2014
24,797
26,130
31,671
833,515
911,086
1,038,280
808,718
884,956
1,006,609
As of March 31, this year has seen an 8.5 decrease in bankruptcy filings over last year’s figures. What’s more, 2015 had a 10% decrease in filings over 2014. Ohio has also seen its bankruptcy filings decrease by roughly 8% from 2014 to 2015. Bankruptcy figures have been statistically lowering since 2010 as the United States continues to recover from the Recession. But the big question on everyone’s mind remains: How long will this trend last?
Reasons For The Decrease in Bankruptcy
As this article suggests, a decline in bankruptcy filings can be linked to an upturn in several events. The economy, for one, has been gathering steam as unemployment rates in both the state of Ohio and across the country have fallen. As companies are performing better, the need to file for bankruptcy diminishes.
Another major benefit to businesses and consumers alike is the availability to borrow funds at extremely low-interest rates. This cycle of “cheap money” has allowed companies to take out loans and pay them back at very affordable rates; consumers, too, can get mortgages with great rates and not worry as much about facing foreclosure.
What Goes Down Could Come Up
While we continue to enjoy a dip in interest rates, it’s still possible for the Federal Reserve to increase these rates; because it hasn’t happened in any dramatic fashion yet doesn’t mean it never will. On the contrary, many financial professionals say we most definitely will see the upturn, but we just don’t know when. An uptick in interest rates means the “cheap money” goes away, and companies who have been able to hold on because money was so affordable are going to lose their footing, according to some experts. As a result, the number of bankruptcy filings could rise.
Some experts also say that companies in the oil and gas industries could struggle more because their offerings tend to see more fluctuations in value than other industries. They say the market value for oil and gas will likely see a reduction more so than an increase, which could hurt and possibly end some businesses in that field.
Indeed, we have already seen a bit of a bump in the commercial sector. The American Bankruptcy Institute reported an increase of 10% in July 2016 commercial filings over July 2015. The overall figure for all bankruptcies filed this year remains 15% lower than 2015.
Questions about Bankruptcy? Ask an Attorney
If you are suffering from your own financial crisis, you may want to speak to an Ohio bankruptcy attorney about your options. The attorneys at Cleveland Bankruptcy Attorneys can educate you on available options and help you decide what you need to do to get yourself out of debt. Call us today for a free consultation at (216) 586-6600, or email us at advice@clevelandbankruptcyattorney.com.