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Fitch Ratings Reports Personal Bankruptcies on the Decline for Fourth Consecutive Year

Posted on in Bankruptcy

As per iStockAnalyst, an Oregon based online subsidiary of Wall Street Tools, LLC, Fitch Ratings recently reported that consumer bankruptcy is expected to continue to decline throughout the remainder of 2014. Fitch Ratings, a global rating agency, attributes the decline to lower unemployment rates coupled with a recovering economy. Personal bankruptcy rates are expected to decline by eight to 10 percent, marking the fourth consecutive year of lower instances of personal bankruptcy protection petitions.

Although 2014's projected decline is not as significant as the notable 12.6 percent decline for 2013, Fitch reports that the trend is expected to hold steady as banks relax underwriting standards as a means to lessen the burden on the American consumer, as well as extending larger personal credit lines. The Fitch Ratings report also indicates that this downward trend could potentially impact the number of personal bankruptcies significantly.

This trend supports the lowest bankruptcy rate since 2007 and may be further contributed to a more “prudent” approach to personal consumerism. Fitch Senior Director Steven Stubbs believes that consumers are considerately more reluctant to adjust their Debt-to-Income Ratio (DTI) by increasing the limit of personal credit available. Stubbs further attributes this to the lack of wage growth in the labor market, which is evident as consumer consumption rates continue to decline.

Although this recent report is a promising indicator of personal bankruptcy trends, the data did find that personal bankruptcies due to unpaid medical bills, maxed credit cards or unpaid mortgages still account for nearly three out of every five Chapter 7 or Chapter 13 bankruptcies filed.

Although these statistics are encouraging, bankruptcy and possible foreclosure still remains a startling reality for many American consumers.

If you are currently considering bankruptcy or want to learn more your legal options regarding a sound foreclosure defense to save your family home, the skilled Lake County bankruptcy attorneys of Newland & Newland, LLP have been successfully working with consumers in the Arlington Heights, Libertyville, Crystal Lake and Waukegan areas since 1993. Contact one of our convenient office locations to schedule your initial consultation today.

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