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The U.S. economy seems to be making a slow recovery from the 2008 market crash in 2013. More people are able to find work after months or years of unemployment and financial hardship. Recent statistics show that the number of people seeking bankruptcy protection has fallen. While that may be a sign that the economy is improving, many are still finding it difficult to make ends meet and should consider bankruptcy as a debt relief option.

Bankruptcy filings plunge

Bankruptcy filings have dropped precipitously across the U.S. in the past few years. According to an analysis of data supplied by the U.S. Bankruptcy Courts performed by Epiq Systems, the number of bankruptcy filings has decreased by 30 percent from 2010 to 2013. The report showed that the number of bankruptcy petitions people filed in the first quarter of 2013 in the 50 states and the District of Columbia fell below 261,000, a 16 percent decrease from the same time in 2012.

California had one of the most notable drops in bankruptcy filings, at a 30 percent decrease in the first quarter of 2013 from the same time in 2012. California had been one of the states hit worse by the recession and had reported some of the highest bankruptcy filing rates in the U.S. California still led the nation in the volume of bankruptcy filings with 36,000 bankruptcy petitions filed in the first quarter of 2013, but per capita filings declined.

Experts suggest that the decrease in bankruptcy filings is attributable to the slow recovery of the economy. Many consumers have been wary of taking on new debt in the underperforming economy, so consumer credit card debt and credit card delinquencies have dropped significantly, according to the American Bankers Association.

Others note that the drop in filings is simply because most of those who need bankruptcy protection have already filed for it. Some predict that the number of Chapter 13 bankruptcy petitions will increase in the future as home values slowly begin to increase. People will no longer see their houses as hopelessly underwater and will look for ways to protect them, such as attempting to become current in mortgage payments through a Chapter 13 repayment plan.

Bankruptcy still an option

The decrease in bankruptcy filings should not indicate to people overwhelmed with debt that bankruptcy is no longer an option. Filing bankruptcy can offer those facing crushing debts a way to regain financial footing. The automatic stay that the court issues when a person files a bankruptcy petition can end debt collector harassment and collection lawsuits. The automatic stay also prevents foreclosure actions from going forward, so people may be able to save homes from foreclosure by filing bankruptcy.

Furthermore, bankruptcy allows people to make several exemptions from the bankruptcy estate for things such as housing, vehicles and retirement savings, so many who file will be able to keep the assets that they require for their basic needs.

Finally, the debt discharge that the court issues when a person successfully completes the bankruptcy process releases a person from personal liability for most debts, so he or she is in a better position to reorganize finances and regain a solid financial footing.

If you are having difficulties making ends meet and feel like you have no options, talk to a seasoned debt relief attorney who can advise you of all your options.

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