Price Pressures Leading to Rise in Consumer Bankruptcies

Prices at the grocery store and on other necessities continue to rise across the country. According to new data reported by CBS News, these price pressures may be one of the major causal factors behind a continuing rise in consumer bankruptcy filings. Over the last year, the numbers show that consumer bankruptcies rose by about 12 percent, and that number is part of a continuing trend. At the start of the pandemic, bankruptcy filings dropped. Yet beginning in 2022, consumer filings began to rise and have continued on that upward trend through 2025.

What are price pressures, and how are they leading to more bankruptcy filings? Moreover, if you are struggling with debt, should you consider bankruptcy like many other Americans? Our West Palm Beach bankruptcy attorneys can provide you with more information.

Understanding Price Pressures and Increase in Bankruptcy Filings

Price pressures include increased costs that affect individuals. As the CBS News report emphasizes, inflation has led to the increased cost of necessities, such as groceries and utilities. Those consumer price increases largely have not been met by employers through cost of living adjustments to wages, which means that many consumers have had to readjust their budgets — and many simply do not have the incomes to do it comfortably. In addition, student loans have come due after a lengthy payment pause tied to the pandemic, and just recently, consumers have started facing collections for unpaid and delinquent student loans.

With prices increasing, student loans becoming due, and wages remaining relatively stagnant, consumers are struggling to meet their needs with their income and struggling to repay debt they already owe, often while accruing new debt. All of these factors may be contributing to more bankruptcy filings, the article suggests. In addition, many of these consumers are now being contacted regularly by collectors, and a bankruptcy filing often provides a much-needed “financial reset,” according to the report, “stopping collection calls and wiping out some or all of [consumers’] debt.”

Bankruptcy Options for Consumers

Individuals who want to file for bankruptcy may be able to file for reorganization bankruptcy under Chapter 13, or liquidation bankruptcy under Chapter 7.

Liquidation bankruptcies require that the debtor pass the “means test,” which is designed to show that the debtor’s income and assets are sufficiently limited for a liquidation bankruptcy to make sense. Most debtors can be eligible for a reorganization bankruptcy, through which you can restructure your debt, catch up with creditors over time, and even stop a foreclosure if your home is currently at risk.

Contact a West Palm Beach Bankruptcy Attorney for Assistance with Your Consumer Bankruptcy Case

Costs are rising in Florida and across the country, and many consumers are struggling to make ends meet. Even if you are gainfully employed, it can be difficult to afford everything that your family needs, and living in a paycheck-to-paycheck situation is common. If you are struggling to repay debts, filing for personal bankruptcy may be something to consider. As we discussed above, there are different types of bankruptcies for individuals, and you may be eligible to file for a type of reorganization bankruptcy through which you can restructure debt and catch up on debts with creditors, all while avoiding the liquidation of any assets. One of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan Delaney & Eller, PLLC can speak with you today about your options. Contact us for additional information.

Source:

cbsnews.com/news/bankruptcy-filing-rise-consumer-business-epiq/