Is Filing for Bankruptcy Common?

Is Filing for Bankruptcy Common?Anyone that’s considering filing for bankruptcy may have a series of questions about the drawbacks and benefits of bankruptcy and whether the filing process will be the right decision for their future finances. People that are considering filing for bankruptcy also wonder just how common the filing process is. If you’re thinking of filing for bankruptcy, you may be surprised to know that the filing process is more common than you might think. Bankruptcy doesn’t have to be a personal failure, instead, it’s an excellent way that you can take control of your finance. 

Most personal bankruptcies are triggered by events that are outside of a person’s control. They often occur as a result of large economic issues, medical expenses, and other emergencies that come up over the course of a person’s life. Although bankruptcy can have a serious impact on your finances for the future, it is a less severe option than going deep into debt that you can no longer repay. 

If you find yourself in a position where it’s difficult for you to manage your finances, contacting a bankruptcy attorney and scheduling a free consultation can make sure that you can learn more about resolving your financial difficulties and accessing improvements for your future.

How Common is Bankruptcy?

For the past few decades bankruptcy is becoming more commonplace. In the year 2005, bankruptcy was thrust into the spotlight as there were more than 2 million filings across the course of the year. One in every 55 households in the US had someone filing for bankruptcy and the numbers have gone down since then but the process does not carry the same stigma that it once did. 

Most of the bankruptcies carried out in the United States are filed by individuals and business bankruptcies only account for 3% of filings every year. One of the most common reasons that bankruptcies are filed for include medical debt. Most of the time, this is related to serious accidents or emergency medical expenses that were not covered under insurance. There’s also lost time due to an illness or injury that can cause debt to continue snowball. Other reasons for bankruptcy filing often come down to a reduced income, accumulation of credit card debt, job loss, and other unexpected expenses. Bankruptcy in relation to divorce her marital problems is also a popular reason for filing. 

US Courts Statistics

The number of bankruptcy filings for 2019 was 773,361 in the United States. Only 22,483 were made by businesses with the remaining 750,878 filings made by non-businesses. 479,043 filings were made under Chapter 7 bankruptcy where his 286,635 filings were done under Chapter 13. 

Am I Going to Lose Everything Filing For Bankruptcy?

One of the top reasons that people fear filing for bankruptcy is that it could mean them giving up everything that they own. Bank accounts, houses, vehicles, and more are targets that many people fear has a loss of their assets. If you’re filing for a chapter 13 bankruptcy will be able to hold onto your assets and the value of your assets will not factor into your repayment plan. 

Filing for Chapter 7 liquidation bankruptcy will allow you to retain certain abandon or exempt assets of to a certain dollar amount. This often ensures that you can hold onto your primary residence, simple possessions like furniture, appliances, and electronics as well as a standard, non-luxury vehicle. If you don’t want to place any type of risk on your assets for the repayment of your debts, it’s always wise to try and seek a chapter 13 bankruptcy approval instead of a chapter 7 bankruptcy option. 

Consider how common bankruptcy filing can be today and remember that you have options for your bankruptcy in the future. Contact us today if you would like to learn more about filing for bankruptcy.