Following a national trend, personal bankruptcy filings were down for the first four months of the year. Of course, while some are pointing to this as a sign of the downward economic trend finally starting to turn around, others are staying cautious as extended unemployment benefits are expected to be phased out and banks are once again initiating foreclosures.
When looking strictly at the changes in percentages of consumer bankruptcy filings, nationwide there was a 13 percent decrease for the first four months of 2012. Florida mirrored this statistic, also with a 13 percent decrease through April. In Orlando, there was a 10 percent drop during this same time.
However, it should be noted that Florida still ranks No. 2 in the country in terms of the sheer number of bankruptcies that are filed.
The CEO of one credit card information and comparison site said that since the recession it does appear that people are being more careful when it comes to acquiring credit card debt. He claims that over the past few years, credit card debt has been continually declining. However, for the month of March, there were increases.
When looking at why there was a decrease in people filing for bankruptcy, some point to the fact that unemployment benefits were being extended. On top of that, due to controversy regarding the foreclosure process, many banks took a step back in order to evaluate and implement new guidelines for foreclosure. This means that more homes that probably would have been foreclosed on a few years ago will now start to make their way through the foreclosure pipeline.
All of this being said, while it is certainly good news that bankruptcies were down for the first four months, with these changes and the fact that many are still financially struggling, it will be interesting to see how this effects bankruptcy statistics over the next several months and years.
Source: Orlando Sentinel, “Fewer people filing for bankruptcy in Orlando raises hope of improving economy,” Richard Burnett, May 17, 2012