Is Inflation Forcing You Into Bankruptcy?

While inflation has seesawed over the past few years, and has dropped again this year, headed towards pre-pandemic lows, it could be that the financial strain is only now taking its toll. Truth be told, it’s been decades since we experienced those highs. And while it’s now at 2.5% – closer to the Federal Reserve’s 2.0% “ideal” limit – prices are still up, and people are still struggling.

Individuals who were already having a rough go over the past few years may now find themselves under seemingly insurmountable debt. At Hausen Law we understand that there can be countless factors that bring you to bankruptcy, and we’re here to help.

Inflation And Bankruptcy

Inflation doesn’t cause bankruptcy, which is typically spurred on by life circumstances and situations like divorce, medical debt, loss of income, and other events. That said, inflation does cause a higher cost of living while simultaneously lowering purchasing power, attacking consumers from multiple directions and undermining financial security. 

Higher interest rates also typically accompany inflation, meaning that it costs more to borrow or take on new debt, like a home or vehicle. Both situations work against the average individual and make it that much more difficult to sustain financial health. Add an unexpected life event or two to the mix, along with policy changes and climbing credit card debt, and the situation can quickly become dire. Many find themselves behind on payments and suffocated by debt. 

As the cost of everyday items like groceries, gasoline, vehicles, clothing, utilities, furniture, and other vital goods and services continues to rise, basic daily life could become hard to afford. And since average salaries aren’t keeping up with costs, this can even happen to folks who are working full time jobs, but still find it a challenge to keep current on bills, let alone pay down debt. That’s because as more and more of your income goes to the unavoidable costs of daily life, you have less funds available for debt repayment. For individuals who are on fixed incomes, this is an even more concerning reality.

2023 saw an additional 59K+ personal bankruptcies over the previous year, evidence that recent financial stresses have caused crises for some.  Thankfully, Congress have made provision for individuals to file for bankruptcy and get back on good financial footing.

File For Bankruptcy In Ohio

When debt stacks up and you feel trapped by circumstances brought on by factors outside of your control, bankruptcy is a legal means out of a bad situation. One lesson to take away from the recent inflation rises and falls is that global and local issues that are far removed from your own life struggles can have a powerful impact on your financial status. This isn’t a failing and you don’t need to blame yourself. Instead, use this as an opportunity to find a fresh start. 

When life circumstances deal you a bad hand, and you’ve done all you can, there’s no shame in reaching out to a chapter 7 bankruptcy lawyer to learn how you can move forward and regain financial stability. Whether you end up filing for a chapter 7 or chapter 13 bankruptcy, financial health is well within reach.

Bankruptcy Questions Answered By Experienced Ohio Bankruptcy Lawyers

For help with all things bankruptcy in Ohio, contact our Northeast Ohio Bankruptcy Attorneys–we’re here to help. Hausen Law is happy to serve all of Northeast Ohio, including the Akron, Canton, Cleveland, Wooster, Dover/New Philadelphia, and Youngstown communities. Contact us today to set up a free consultation or to inquire about our credit counseling and credit repair programs.