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Though bankruptcies are down, consumers may still consider debt management plan to avoid it
By Angela Hawke on Feb 26th, 2010
Bankruptcy is an option that no consumer should want to take, especially because of the effect it can have on a person's credit score and ability to get a loan.
As it turns out, the number of people who had to turn to bankruptcy declined in January according to a recent report from the American Bankruptcy Institute. Citing data from the National Bankruptcy Research Center, the ABI reported that bankruptcy filings went down 10 percent when comparing December and the first month of the year.
In all, 102,254 consumer bankruptcies were filed in January, compared to the 113,274 seen during the last month of 2009. However, a year-over-year comparison shows that bankruptcy filings were up 15 percent.
"While January represented a drop in filings from the previous month, high unemployment rates, unsustainable mortgage burdens and other economic stresses will push more consumers to seek the financial relief of bankruptcy in 2010," said ABI executive director Samuel Gerdano.
Though bankruptcy filings may increase further in 2010, consumers who are having problems with debt may have other options they can pursue to avoid getting to that point. For example, a debt management plan may present consumers an opportunity to pay off what they owe in a shorter amount of time.
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