Bankruptcy Filings Decline, Is It The Calm Before The Storm?

Bankruptcy filings are on the decline, after reaching a high 2011. Over the past five years bankruptcies have fallen by 50 percent for Chapter 7, and by 25 percent for chapter 13. Business reorganizations have fallen as well from a high of almost 12,000 in 2011 to little more than 7000 at the end of 2016. However, for those of us who have very clear memories of the previous recession there are certain markers that make one nervous. For instance, housing prices are now back at the level they were before the bubble popped. There is a huge amount of consumer debt out there in auto loans, student loans, and credit card debt. It’s hard to say with the factors in play that we’re not so much exiting a recession and recovery, but getting our heads above water before the next wave.

Retail Demise

With the recent news of closures in the retail sector, there may be some rocky times ahead. Walmart, Macy’s, Kmart, and Sears are some of the bigger names closing stores and cutting staff. Shopping mall style awards such as Sports Authority, Limited, Ocean Pacific, and Aeropostale are either in trouble or already closing their doors. Layoffs had reached 44,000 for the year back in August, and losses were only mildly offset by the Christmas hiring season. Retail is moving online at and inexorable pace, leaving the ground to big box stores and discount retailers like T.J. Maxx, Ross, and Dollar Tree. High-end retail is still doing well, with stores like Bergdorf Goodman, Neiman Marcus, and high-end specialty shops still catering to the carriage trade. However, expect retail losses and closures to accelerate this year.

Recession Proof?

There are a lot of different guides that tell you that you can put recession proof yourself. I’m going to have to say that to a degree, certain professions are recession proof, certain ways of saving money are recession proof, but the best way to recession proof yourself is to reduce your risks. Taking a look at your financial situation as it stands now can help you in a number of ways. If you are in debt now, you may want to try to pay down. If you are past the point of being able to pay it down and are barely keeping up with the payments, then it may be time to consider filing for bankruptcy. You’d be part of a declining trend, but if the recovery tanks, you will at least be clear of your debts in a worst-case scenario.

If you are feeling a little nervous about what the future may hold, then make an appointment to come see us at our West Palm Beach or Fort Lauderdale offices. We are open seven days a week, and your initial consultation is free. Financial counseling can help you get back on a better footing to withstand whatever slings and arrows await us in 2017, and bankruptcy may be able to wipe your slate completely clean.