Our Escondido readers may have seen the latest report on the unemployment rate in America, which recently ticked back up a bit. Even though more jobs are being created than are disappearing, most of the indications point toward a painfully slow economic recovery, in California and throughout the country. However, another barometer used by many experts, the rate of bankruptcy filings - both Chapter 7 personal bankruptcy and Chapter 11 business bankruptcy - provided a bit of good news in the latest figures.
According to the reports, the numbers from the month of May - the last month from which numbers are available - show that bankruptcy filings decreased throughout the country in that month when compared to May of last year. The number of total bankruptcy filings stood at 96,430 last month.
While that number may seem high, it actually is an improvement. One hopeful nugget from this data is that business bankruptcies decreased at a higher percentage than consumer bankruptcy filings. Business bankruptcy filings were down a healthy 25 percent, while the consumer filings drop came in at 11 percent. If businesses are doing better overall there may be hope of sustained job creation and a subsequent drop in the unemployment rate.
Still, there are far too many people in America, including in Escondido, who are probably looking for answers to their own troubled financial situation. Although a drop in the number of bankruptcy filings may be a good indicator of economic recovery, it should be remembered that bankruptcy is a path toward a fresh start, for both individuals and businesses. Taking advantage of this important consumer tool is something that thousands of people consider every day.
Source: Los Angeles Times, "Bankruptcy filings decline in May," Alejandro Lazo, June 5, 2013