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Bankruptcy filings fall, but warning signs linger

Economic indicators in Texas and around the country have been improving steadily in recent years, and this has led to a sharp fall in business and personal bankruptcy filings. Chapter 7, 11 and 13 petitions soared in the wake of the 2008 financial crisis, but they have since fallen by more than 50 percent according to a report on the federal judiciary released by Supreme Court Chief Justice John Roberts on Jan. 8.

However, the figures also reveal that older Americans are filing for bankruptcy in far greater numbers than in previous years. Experts say that these filings are usually prompted by crippling medical bills. The Affordable Care Act was written in part to prevent this type of financial hardship, and it has been somewhat successful in this regard as bankruptcy filings prompted by medical bills have fallen among younger Americans according to the report.

Bankruptcy filings have also fallen due to the provisions of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. This law created a more complicated bankruptcy filing procedure and made student loan debt not subject to discharge. This means that filing a Chapter 7 or Chapter 13 petition may not provide relief to graduates struggling to make ends meet, and filing the necessary paperwork has become more expensive for all petitioners.

Attorneys with experience in this area may understand how difficult it can be to cope with an unmanageable financial situation and daily harassment from debt collectors. While the costs of filing a bankruptcy petition may have risen due to changes in the law, this should not prevent individuals and families from finding out about their debt relief options.

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