The rise in consumer filers seeking bankruptcy protection is expected to continue in 2024.  Various factors, such as the pandemic stimulus reductions, increased interest rates, and historically high levels of household debt.

According to data from the New York Federal Reserve, household debt reached a record high of $17.3 trillion by the end of the third quarter, accompanied by a slight increase in delinquency rates. However, these rates remain below pre-pandemic levels.

In the past two years, both businesses and households have faced tighter financial conditions due to the Federal Reserve’s aggressive interest rate hikes aimed at controlling inflation. Mortgage loan rates surged to their highest levels since the turn of the century.

Nevertheless, borrowing costs and overall financial conditions have eased during the fourth quarter of 2023, following the Fed’s indication that it was concluding its rate-hiking cycle. Additionally, Fed officials have recently signaled their expectation of rate cuts this year.