History as well as pop culture trends tend to repeat themselves. In the late 70’s to mid 80’s there was an obsession with 50’s culture. Currently the 80’s themselves are popular once again, but sadly something else is back in a big way…bankruptcies.
Now we’re not talking about the levels seen during the Great Recession but there is an undeniable trend upward.
Data from Epiq Systems shows bankruptcy filings hive risen steadily over the past three years. In New York they hit 34,711 in 2018 up from 30,112 just two years before.
Consumers nationwide are facing overwhelming debt loads and have begun filing for bankruptcy for relief, some going as far as becoming reliant on food pantries. Again using New York as an example, 1.5 million New Yorkers are taking advantage of the food bank there, many citing bankruptcy as the reason why.
But its not just the individual or family that’s falling victim, companies are also filing for bankruptcy triggering a wave of job cuts. Over the first seven months of 2019 nearly 43,000 job losses were announced, nearly 20% more than all bankruptcy-linked job cuts in 2018. Just last week Barneys New York filed for Chapter 11 bankruptcy protection.
According to data released by the ABI, US bankruptcy filings surged by 3% in July 2019 from July 2018. If the trend continues, this year’s overall total of bankruptcies is on pace to hit 796,000, far exceeding the 777,000 for last year.
Meanwhile, record American household debt, near $14 trillion including mortgages and student loans, is some $1 trillion higher than during the Great Recession of 2008. Credit card debt of $1 trillion also exceeds the 2008 peak.
American banks have scaled back on the more stringent lending and underwriting standards that followed the 2008 financial crisis, leading banks to purge their portfolios of toxic debt.
According to analysts, Americans are spending heavily, again — and often recklessly.