Inflation and bankruptcy

If you are feeling extra financial pressure over the past couple of years, you are not alone. Inflation and bankruptcy go hand in hand.  Bankruptcies are on the rise in the United States since 2023. While multiple factors have contributed to this increase, one significant factor is rising inflation following the pandemic. As prices for basic goods and services soared as the American economy started up again, many households found it hard to make ends meet and the need to rely on credit.

Professional analysts ( Newsweek )predict that the elements that caused the increase will continue and the number of bankruptcies this year might well exceed the 445,186 filed in 2023 by individuals and businesses for the following reasons:

• Inflation’s effect on families — while the rate of inflation has slowed a bit, prices continue to go up, making it more expensive for families to afford basic necessities like housing, food, healthcare and transportation. As the cost of living increases, individuals and families may resort to credit cards or loans to cover expenses and accumulate debt that becomes increasingly difficult to manage.
• Increased business costs — in addition to its impact on personal bankruptcies, inflation can trigger a ripple effect that affects companies and their workers. Businesses facing higher costs might be forced to raise prices or lay off employees or delay raising salaries.
• Winding down of pandemic stimulus — to deal with the economic devastation caused by the pandemic, the federal government spent trillions of dollars on a wide range of relief measures, such as rent relief and Paycheck Protection Program loans. As the crisis subsided, these expenditures have gradually gone away, removing key safety nets and causing problems for individuals and institutions that relied on these measures.
• Inflation and bankruptcy directly affect consumers.  As prices rise and the buying power of the dollars slips people are forced to rely on credit more and more.  If you would like to discuss your bankruptcy options feel free to visit our website:  http://www.massbklaw.com