U.S. bankruptcy filings by consumers surged 5.4% in January

Are bankruptcies becoming the new norm again?

According to a new report from the American Bankruptcy Institute, the number of U.S. bankruptcy filings by consumers rose 5.4 percent last month to 52,421. This is up from the 4.5 percent increase in December.

What makes this interesting is that this is the first time since 2010 that consumer bankruptcies have risen two consecutive months.

It isn’t just consumers who are filing for bankruptcy, it is also American businesses. The same report found that commercial bankruptcies are up 26 percent from 2015 and are the highest since 2014.

Here is the chart:

Although the numbers are far lower than where they were during the economic collapse, the latest figures suggest that United States consumers may be at a turning point. In other words, American consumers may have borrowed too much money and are now facing immense levels of debt that can’t be paid back. Simply put: the consumer is tapped out.

We are presently seeing all of the warning signs of a financial crisis:

– Bankruptcies are steadily rising.
– Money supply growth has moderated.
– Credit card debt is approaching $1 trillion.
– Americans are flipping houses at surging rates.
– Subprime borrowers are receiving $1,000 credit cards at alarming rates.
– Tumbling auto sales numbers are causing the Big Three to be worried.
– Stock valuations are soaring to record highs.

In addition, interest rates are beginning to go up, the national debt has topped $20 trillion, most of the country is living paycheck to paycheck and the Federal Reserve has admitted that it doesn’t have any tools left in its arsenal should another economic collapse unfold.

Whether the next recession happens under Donald Trump’s watch or under his successor remains to be seen, but the nation’s future prospects remain grim.