Data released Tuesday showed that Americans filed more than 39,000 bankruptcy cases in Aug. 2023, an 18 percent increase from the same time last year.
The data released by Unusual Whales details how, along with personal bankruptcy filings, there were more than 41,600 new bankruptcy cases recorded in August, including for businesses. This marks the thirteenth consecutive month that bankruptcy filings have shown a year-over-year increase under the Biden administration’s embarrassing and dangerous economic policies.
The bankruptcy filings are not a surprise to anyone with a finger on the pulse of the domestic and global economy, but likely come as a shock to those just trying to keep afloat. As so many families were lulled into a false sense of financial security during and after the COVID-19 pandemic, their ill-advised spending habits have landed them in hot water.
BREAKING: Americans filed more than 39,000 bankruptcy cases in August, an 18% increase from the same point last year,
— unusual_whales (@unusual_whales) September 25, 2023
Many folks bought homes they couldn’t afford in the last two years, often with minimal down payments, bad credit and sky-high mortgage rates. Some of these individuals were banking on a pause or total relief of their student loan debt to keep the lights on, but this hasn’t really materialized like people thought it would (duh). (RELATED: Real Estate ‘Apocalypse’ Could Destroy American Economy, Midsize Cities, WaPo Finally Realizes)
The most terrifying thing is that a lot of folks set-up interest-only payments for property purchases for the first five years or so of their mortgage. This means lower payments today, but zero equity build-up in homes these individuals won’t be able to afford once they’re forced to pay the equity and interest — which will almost definitely lead to more bankruptcies, foreclosures and worse.
I’ve been saying for years that our current financial bubble won’t last. And it looks like it’s been slowly bursting for more than a year. If you’re one of those people who bought a home with a high mortgage rate in the last 24 months, sell it today and downsize to something you can actually afford. Trust me, you’ll be grateful in the long term.