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Bankruptcy lawyers expect filings to increase in 2022

By Adam Pinsker, IPB News | Published on in Economy, Government, Law

An Indianapolis-based attorney is expecting the floodgates to open on bankruptcy filings at the beginning of 2022, and the COVID-19 pandemic is to blame.   After the federal eviction moratorium expired over the summer, the Consumer Financial Protection Bureau enacted rules to make It difficult for banks to foreclose on homes.  However, those rules expire at the end of the year.

Bankruptcy Attorney Mark Zuckerberg expects filings to increase to their highest point since the housing crisis a decade ago. He says people generally file for Chapter 7 or 13 after suffering a significant event that hurts their finances:  “It’s either divorce, loss of job, medical bills for death of a family member, and they just can’t handle the burden of debt that they’re under.”

Zuckerberg says Chapter 13 allows people to pay back their debts over a three-to-five-year period, while Chapter 7 releases you from paying unsecured debts, such as credit card and medical bills.   Filing for either of these classes of bankruptcy will affect your credit score for several years.