The Economy and what is really going on

Bankruptcies are on the rise.

The latest statistics released by the Administrative Office of the U.S. Courts show that personal and business bankruptcy filings have increased by 10 percent in the twelve-month period ending June 30, 2023, compared with the previous year. The total number of annual bankruptcy filings was 418,724, up from 380,634 cases in the previous year. Business filings saw a significant increase of 23.3 percent, rising from 12,748 to 15,724 in the year ending June 30, 2023. Non-business bankruptcy filings also rose by 9.5 percent to 403,000, compared with 367,886 in the previous year.

It is worth noting that filings over any 12-month period have increased only rarely since filings peaked in 2010. Bankruptcies fell sharply after the pandemic began in early 2020, despite some early COVID-related disruptions to the economy. However, the latest figures suggest that the economic recovery has not been evenly distributed, and some businesses and individuals are still struggling to stay afloat.

Bankruptcy can be a difficult and emotional process, but it can also provide a fresh start for those who are struggling with debt. It is important to seek professional advice and explore all available options before making any decisions about bankruptcy.

There are six different types of bankruptcy according to the United States Bankruptcy Code.?Each type is named after the chapter in the code where it is described. The following is a summary of the most common aspects related to each bankruptcy option:

Personal Bankruptcy:

Chapter 7: Liquidation. This is the most popular type of bankruptcy among individuals who get the chance to start anew after filing. This chapter is the most convenient solution when the debtor has no possibility of repaying the money he or she owes, there are no cosigners, and the creditors' legal action is impending.

Chapter 13: Reorganization. This type of bankruptcy is for individuals who have a regular income and can pay back their debts over time. It allows the debtor to keep their property and pay off their debts in installments.

Business Bankruptcy:

Chapter 7: Liquidation. This type of bankruptcy is for businesses that are unable to continue operating and need to liquidate their assets to pay off their debts.

Chapter 11: Reorganization. This type of bankruptcy is for businesses that have hit a bad patch and might be able to survive if their operations, along with their debt, can be reorganized.

Chapter 12: Family Farmer or Fisherman Reorganization. This type of bankruptcy is for family farmers and fishermen who have regular income and need to reorganize their debts.

Chapter 9: Municipal Reorganization. This type of bankruptcy is for financially distressed municipalities, including cities, towns, villages, counties, and school districts. Under Chapter 9, municipalities do not have to liquidate assets to repay their debts but are instead allowed to develop a plan for repaying them over time.