Inflation Now Forcing Consumers Into Bankruptcy

COLUMBUS, Ohio, May 15, 2023 (Newswire.com) - Inflation is forcing many into bankruptcy. Now that the pandemic financial support systems are gone, bankruptcy is becoming the next refuge for consumers who cannot pay basic living expenses due to inflation. Bankruptcy specialist Richard West, Ohio bankruptcy lawyer, explains why inflation is now becoming a leading cause of personal bankruptcy.

"The historical reasons for filing bankruptcy have remained unchanged for decades," according to attorney Richard West, a top filer of bankruptcy cases in Columbus, Ohio. The reasons have been:

• Medical
• Job Loss
• Credit Card debt
• Divorce
• Unexpected expenses

"Having filed personal bankruptcy cases in Ohio for over 35 years, I am now seeing more bankruptcy cases caused by inflation," explains West. "In Ohio, consumers who were making ends meet are now being forced into bankruptcy for no reason other than inflation. This is unprecedented," West states. People who are drowning in debt need to explore bankruptcy sooner, rather than later.

"Inflation contributes to personal bankruptcy in several ways," says West. Here are a few examples:

• Increased Cost of Living: Inflation increases the cost of essential goods and services, making it difficult or impossible for you to afford your basic living expenses. This leads to increased borrowing and more debt, and often, to filing for bankruptcy.
• Reduced Purchasing Power: Inflation reduces your purchasing power, making it difficult or impossible to pay for even basic needs. This is especially frightening for anyone on a fixed income or those who have had their hours cut back at work. 
• Higher Interest Rates: Inflation has resulted in dramatic increases in the interest rate you pay for all of your credit purchases. This, in turn, makes it harder to pay down your balances. 
• Inability to pay down your balances. This means more of your money goes to interest, making less available for living expenses.

Historically, inflation was considered, at most, an incidental factor in forcing people into bankruptcy. All that is changing, according to West: "Inflation by itself is now 'tipping the scales' for some families, forcing them to choose between paying for basic living expenses and paying down debt."

All of the traditional factors that force consumers to consider bankruptcy remain, but are now amplified by inflation, which causes many to go from "treading water" to drowning in debt.  Bankruptcy is becoming the new "social safety net" for consumers being squeezed beyond their ability to keep their finances under control.

How to fight back against inflation

"As a 35-year veteran consumer bankruptcy attorney, I counsel people who feel embarrassed to seek my advice," says West. If you are unable to reduce the debt significantly in a reasonable amount of time, it's wise to consider bankruptcy. With the proper guidance, you can recover your credit in as little as a year after discharging debt.

Source: DebtFreeOhio