Bankruptcy Filings on the Rise

There was a 5% increase in total bankruptcy filings in July 2019 from the previous month. There were 64,283 bankruptcy filings, up from 62,241 for the same period last year.

There were 452,797 filings in the first seven months of 2019, up from 450,568 during the same period last year. There were roughly 1,000 more consumer bankruptcies at this point this year, compared to the same point last year, the organization added.

It’s a sign that people are taking out more loans without the requisite financial stability or they’ve been hit by an unexpected life event like illness or job loss. (People are twice as likely to file for bankruptcy if their health insurance has been interrupted.)

Americans are spending more. Consumers had $14 trillion in household debt in the first quarter of 2019, according to Federal Reserve Bank of New York data, up from approximately $13 trillion in debt consumers held back in 2008.

The rise in bankruptcies comes off a 10-year low. There were more than 770,000 bankruptcy filings in 2018, down from 1.6 million in 2010. The fall in bankruptcies over the last decade coincided with a 10-year bull market and decades-low unemployment as the economy recovered from the Great Recession, and people regain confidence in the economy and their ability to make payments on their loans.