Consumers Are Ignoring Rising Debt
Many experts believed that the 2020 economic recession, caused by COVID-19, would lead to increased bankruptcy filings. Surprisingly, the number of U.S. bankruptcy filings has dropped 27% over the past year and nearly 40% in the Chicago area.
Historically, rising unemployment claims, as we saw during pandemic-related business closures and layoffs, have led to increased bankruptcy filings. For now, many consumers are sitting it out.
One reason that eligible debtors are able to avoid bankruptcy may be the federal aid received from the 1.2 trillion stimulus package or CARES Act.
Another reason is the emergency government-ordered moratoriums on evictions, foreclosures, wage deductions and garnishments. Student loan payments have been deferred and many lenders have offered forbearance on mortgage payments.
But waiting to file bankruptcy by consumers carrying a large amount of debt has a price, too. Late fees and interest charges on unpaid credit cards continue to accumulate. Liability for bounced checks, unpaid rent and unpaid medical bills doesn’t just vanish. Many people will find that the debt they didn’t have to pay for the past year has now left them in a deeper hole.
Soon, government-ordered moratoriums and lender forbearance programs will end. Then, the collectors will begin calling and the lawsuits will follow. Evictions and foreclosure cases will flood the courts. Creditors will obtain judgments and money will be garnished from paychecks and bank accounts.
Then, the number of people in need of bankruptcy protection are expected to rise. We will be ready to help.
MARTUCCI LAW is an established and experienced law firm that can and does help people through financial crises and helps keep the wolves at bay. We can negotiate settlements of debts, defend civil lawsuits or stop collections upon filing a bankruptcy petition. Those who qualify for a discharge under Chapter 7 may be debt-free and able to enjoy a fresh start within a few months.
Others, who own property or have higher incomes, may enjoy freedom from collection activity while they make payments under a Chapter 13 plan. In many cases, a substantial amount of debt is discharged at the conclusion of a Chapter 13 case.
If you or a loved one are facing wolves disguised as debt collectors, you need to arm yourself with a good attorney. Greg Martucci is good bankruptcy attorney with over 30 years of experience helping debtors in crisis. Call Martucci Law at 630-980-8333 to learn more about remedies for debtors under the Bankruptcy Code and to schedule your FREE initial office consultation.