The last several years have been difficult for people in the United States. There have been many times when small businesses struggled, individuals went without work and many found themselves dealing with economic hardships. They may have had to use credit to get by or to rely on loans to support themselves.
Bankruptcy isn’t always the right choice, but it may be if you find that you can’t get your financial footing back after a series of financial impacts, like sudden medical bills or the loss of a job.
The economic downturn may mean bankruptcies will ramp up in 2022
Since the last two to three years have been relatively unstable due a faltering economy, it’s not surprising that many bankruptcy attorneys believe that filings will increase in 2022. The eviction moratorium ended in the summer of 2021, and the job market is still struggling. On top of that, people are falling ill, being hospitalized and dealing with sudden financial losses as a result.
When a significant event hurts your finances, it’s reasonable to file for Chapter 7 or 13 bankruptcy.
Choosing bankruptcy to get back on track
Bankruptcy could help you get back on track with your finances. Whether you’ve lost a loved one, lost your job or had higher expenses than expected for other reasons, it’s possible that either Chapter 7 or Chapter 13 bankruptcy could be a good choice.
Chapter 13 bankruptcy allows qualifying applicants to pay back what they owe over the next three to five years. Chapter 7, alternatively, allows debtors to be released from paying back unsecured debts in exchange for liquidating nonexempt assets.
A bankruptcy will stay on your record for up to a decade, with Chapter 7 staying on your credit report for around 10 years and Chapter 13 for up to seven. That being said, if you are struggling with your finances, bankruptcy could still be the right choice. Bankruptcy allows you to mitigate your debts and to get back into control. Additionally, you may be able to get loans and credit much sooner than 7 to 10 years, so the bankruptcy won’t necessarily negatively impact you for that entire length of time.