Much has been made lately about the state of the economy, how more people are back to work and unemployment claims are down. Despite this good news, it appears that the number of consumers with past due debt in collections is still a problem. According to a 2014 study by the Urban Institute, 35 percent of consumers have a debt that is in collections.
This is significant given that the nation is nearly a decade removed from the end of the Great Recession. Wages have remained stagnant since that time, which could mean that even though more people are back to work, they are still digging themselves out from financial holes created during the recession.
Moreover, debt collectors see more of an opportunity to make money on unpaid accounts. Since more people are back to work and making an income, the more likely it is that they will be able to pay off unpaid debts. After all, these accounts were essentially worthless during the recession. But now, with more money flowing through the economy, debt collectors stand to make more money compared to past years.
Nevertheless, not everyone has reaped the fruits of the improving economy, and collection accounts continue to be a tough issue for families to deal with; especially when they prevent them from moving past troubling debt. In these instances, it may be a good option to see if bankruptcy may lighten your load so that you can finally move on with life. This may be particularly important if you have a great deal of unsecured debt (i.e. medical expenses, credit card debt, second mortgages). A Chapter 7 bankruptcy, for example, may help in discharging such debt.
An experienced bankruptcy attorney can answer your questions.