Chapter 13 bankruptcies continue to be common in the South
Sometimes in life people run into money problems and need debt relief. Filing for bankruptcy, including Chapter 13, is a big decision that comes to those who are facing tough financial challenges.
While the number of Americans filing for bankruptcy dropped in 2013, the tri-state area of Georgia, Tennessee and Alabama led the country in the bankruptcy rate. Nationwide, the total number of bankruptcies fell 13 percent, reaching a level not seen since 2007.
An executive director of a trade group that analyzes bankruptcy trends shared his thoughts. He said that while annual filings for bankruptcy may continue dropping, as the economy begins to improve and lenders become more lenient with credit restrictions, we may see consumers more willing to spend and borrow money, causing bankruptcy filings to rise again.
Chapter 13 bankruptcies account for less than half of all bankruptcies in the United States. However, the tri-state area saw higher percentages compared to the rest of the country. A Chapter 13 bankruptcy involves paying back your debts over time, with the court supervising such a plan. By contrast, a Chapter 7 bankruptcy involves your assets being sold off in order to pay your debts. Chapter 7 bankruptcies are more common in the rest of the country compared to southern states.
Some may ask why bankruptcy court filings are higher in the south than in other parts of the country. It may because Georgia, Tennessee and Alabama do not require a hearing before lenders can foreclose on a property. This is different from most of the country, which requires court hearings. Recent figures have shown that foreclosures and business bankruptcies are also down across the country.
If you find yourself in financial distress, bankruptcy may be the best option for you. You owe it to yourself to seek counsel from someone who is knowledgeable on the different bankruptcy filings and which may be right for your situation.
Source: timesfreepress.com, “Bankruptcies and foreclosures declined last year; but the tri-state still leads the nation in going broke,” Dave Flessner, Jan. 12, 2014