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Bankruptcy Filings Down in Arizona

The U.S. Bankruptcy Court in Phoenix recently reported a 14 percent decline in bankruptcy filings this April compared to April last year. The Court also reported that this is the 39th consecutive month of improvement in bankruptcy filing rates on a year-over-year basis. Overall, Arizona is also reporting improvements, with bankruptcy filings decreasing by 12 percent in April compared to April of the previous year. Epiq Systems and the American Bankruptcy Institute reported that national bankruptcy filing numbers are also down 13 percent this April, compared to April of the previous year. A separate report by credit researcher Experian confirmed Phoenix’s three-year bankruptcy improvement, reporting that Valley residents had the highest credit-score gain of the 20 large cities studied. The report found that Phoenix area residents have an average credit score of 654 on the Vantage scale of 300 to 850. This is a seven-point increase compared to 2010. The national credit score is slightly higher, at 665, though the number has remained unchanged for four years. Though the average Phoenix credit score is below the national average, further improvements seem promising. Other cities studied in the report include Minneapolis, which had the highest average credit score of 702, as well as Atlanta, which had the lowest score at 646.

However, Debts Continue to Rise

Despite the promising decline of bankruptcy filings, the Experian study found that nationally, consumer debts have been rising, with the average personal debt being $25,927. This average includes credit card debt, auto loans, student loans, and other personal loans but excludes mortgages. Though the debt average has risen, an Experian spokesperson does not necessarily see this is a negative. Rather, higher loan balances could indicate a recovery pattern, where “credit lending is opening up and consumers are becoming more confident.” However, higher debt may eventually lead to more bankruptcy. Bankruptcy can be an extremely stressful and draining process, but depending on the circumstances it may be the best solution to debt. It is also important to remember, however, that bankruptcy can sometimes be avoided. Many who find themselves suffocating under crushing debt feel that filing for bankruptcy may be their only option, but there are alternatives to bankruptcy that can and should be explored when facing potential foreclosure, repossession, wage garnishment, or other legal action. Though bankruptcy is a viable option for some, not every debt situation calls for it. While it is true that bankruptcy can alleviate debt, it also has other repercussions that should be considered. If you are in a spiraling debt situation, it is important to contact experienced bankruptcy lawyers like those at the Oswalt Law Group in Phoenix, Arizona. By discussing your individual financial situation with Oswalt’s experienced lawyers, an action plan can be formed utilizing the skills and extensive knowledge of bankruptcy attorneys to find the best solution to your debt problem.

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