Should I File for Bankruptcy?
If you’re considering bankruptcy and you feel as if you’re the only person in the world struggling with financial obligations, you aren’t alone. Not only are you not the only person, but you also aren’t the only one who feels this way. Financial challenges that are severe enough to consider bankruptcy are an isolating feeling for most.
It’s a situation that’s even worse if you don’t know anybody who has filed and/or you have people in your life who have negative opinions about bankruptcy and the type of person who might file.
But what’s the truth?
Logic tells you there are plenty of people who have filed for bankruptcy, but who are they? Are they like you?
Chances are at least a few of them are because people from all walks of life file for bankruptcy. They come from all different backgrounds, all different income levels, and all different experiences. People who file for bankruptcy are married and unmarried, homeowners and renters, college-educated and GED earners, and everything in between. They are young and old and middle-aged.
And they are opting for bankruptcy because they are struggling financially and want to do something about it.
Every Year Many Different People File for Bankruptcy
In a typical year, three-quarters of a million people file for Chapter 7 bankruptcy. That number is expected to grow in 2020, possibly significantly.
As a matter of fact, there has never been a time that filing for bankruptcy should have less of a stigma. Events entirely beyond our control have created a financial crisis across the country and throughout the world. For many, bankruptcy is now the most sensible option to get beyond this period and look toward the future.
Who is Filing?
What do we know about the people who file for bankruptcy?
According to the Institute for Financial Literacy:
- About three-quarters have a job or are self-employed
- Nearly one-third make more than $30,000 a year
- Almost all of them graduated from high school
- More than half have at least some college
- 5% have a graduate college degree
Why Are People Filing?
There are plenty of events and choices that might lead someone to bankruptcy. But the most common reason by far is medical debt. Nearly half of all filers cite medical bills as the reason they had to take drastic financial measures.
Medical debt is unsecured, so filing for Chapter 7 results in the discharge of that debt. This means you won’t legally be obligated to pay the massive medical debt you’re facing. Filing for Chapter 13 can help you reorganize your debt and offer even more protection for your assets.
Regardless of which chapter you choose, bankruptcy can help you deal with crippling medical debt.
Other common reasons people file for bankruptcy include:
- Student loan debt
Loss of a job
Credit card debt
Sometimes it’s a combination of multiple factors. In every case, a person might have a little bit of control over how bad the situation got, but for most, events beyond their control led them down this path. Having to file for bankruptcy was not their fault and it isn’t yours. But filing is a way to empower yourself and regain control of your financial future.
The bottom line is that bankruptcy affects people of all ages and all socioeconomic classes. Some would even say there is no “type” or “average” person who files. Life is too unpredictable to know who exactly will face events and circumstances that lead them to bankruptcy.