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Bankruptcy filings drop in 2012

Newly released financial information indicates that fewer Americans are filing for personal bankruptcy thanks to renewed interest in saving. The numbers, which come from the Administrative Office of the United States Courts, show that personal bankruptcy filed by individuals dropped by about 13 percent during the first six months of 2012.

During the past two years, bankruptcies have dropped nearly 20 percent, according to the statistics. The decline ostensibly comes as Americans have cut up their credit cards and have begun to save more money in response to the continued recession.

Experts say that Americans have been slowly chipping away at their credit card debt while simultaneously increasing the amount of money they save each month. That means that these families are less vulnerable to economic jolts such as layoffs and other emergencies that could have prompted heavy borrowing without a safety net.

Financial gurus also say that fewer Americans have access to credit these days. Many people have paid down mortgages, purchased their cars outright, and slashed their credit card bills even as the economy continues to limp along, according to many analysts.

Although the trends appear positive, it remains to be seen whether Americans can truly switch their spending habits from excessive to restrained. Initial numbers and anecdotal evidence seem to support a lowered bankruptcy rate, but more time must elapse before our nation can truly declare itself personally financially solvent. But remember that there is no shame in having to file for bankruptcy. This economy has been hard on a lot of people.

Source: Boston.com, "Bankruptcies wane as US relearns how to save," Todd Wallack, Aug. 18, 2012.

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