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Is the economy getting better? Bankruptcy filings drop

The number of bankruptcy filings nationwide dropped 13 percent last year. The Administrative Office of the U.S. Courts reported that 1.2 million bankruptcies were filed in 2012, compared with 1.4 million in 2011.

Louisville is in the Western District of Kentucky Bankruptcy Court, and filings in the Western District were also lower, falling from 11,331 in 2011, to 10,300 in 2012. As a percentage, bankruptcy filings declined 9.1 percent, so a somewhat slower decline than the country as a whole

But, as the old saying about the unemployment rate goes, that it is either 100 percent or 0 percent, meaning you either have a job or you don't, for most people the question of bankruptcy is personal, and what really matters is if you need to file for bankruptcy protection.

If you have suffered a medical problem that caused you to lose your job and now are overwhelmed by your bills, you are less concerned if anyone else needs to file.

You are, however, very interested in how filing a bankruptcy can help your financial situation. Because every bankruptcy is unique to the personal needs of each filer, we cannot tell you which type will work best for you in a blog.

We can, however, tell you in our office, after looking at your financial information. A Chapter 7 can discharge almost all of your debts, but it may not be the best choice if you own a home.

Chapter 13 allows you to reorganize your debts, and can help you keep your car and your home, but it may take five years to complete. Bankruptcy is a powerful tool to rebuild your financial health, so you need to talk over all your options with a bankruptcy attorney first.

Source: Administrative Office of the U.S. Courts, "Bankruptcy Filings Decline in Calendar Year 2012," February 4, 2013

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