In today’s economic climate, financial concerns are quickly growing with the rise of gas prices, grocery costs, and the ever-impending doom of the housing market. It’s no secret that many are struggling to stay afloat and balance the rising cost of living with the uncertainty of our financial future. Because of these struggles, you might notice that more people are turning to bankruptcy. But how common is bankruptcy, and what are some reasons that people file? This post covers these questions and more.
About Bankruptcy
Bankruptcy is a solution for people who have an overwhelming amount of debt. If you are unemployed, underemployed, or a combination of these two, you might struggle to pay your bills and find yourself putting purchases on a credit card. The added credit costs and financial concerns can increase over time because the price of gas and other necessities continues to rise. A higher cost of living and mounting financial struggles may create the need to file for bankruptcy to regain control over your financial situation.
How Common Is Bankruptcy
According to debt.org, filing for bankruptcy has become more and more common. Some statistics show that almost 500,000 people started bankruptcy filing in 2021 alone. That’s a significant number, meaning default is more common than you think. Due to financial hardship and high inflation rates, you or someone you know has likely either filed or might have considered filing for bankruptcy.
Why File for Bankruptcy
The decision to file for bankruptcy is a big one. It’s best to think through the process carefully before making the decision, but ultimately, there are some good reasons to consider filing for bankruptcy.
Reasons to File for Bankruptcy
- Excessive or unmanageable debt
- Reduced or loss of income
- Recent divorce
Typically, there are several steps you have to take before filing for bankruptcy. The first is to determine which type of bankruptcy you want to file. The most common options for consumers are chapter 7 and chapter 13 bankruptcy. If you feel you cannot pay any of your debt back, you can file for chapter 7 bankruptcy, which discharges all of your debt once the courts approve.. In this scenario, both businesses and individuals can file. Chapter 13 is for individual consumers only.
You can make debt payments in installments over time and get to keep your assets, which may be different from chapter 7. In addition, chapter 13 bankruptcy only stays on your credit report for 7 years, while chapter 7 leaves a mark for 10. Whichever option you choose, seek out someone who can give you advice and support. Attorney David Brunelle can guide and walk you through the filing process.
Business vs. Personal Bankruptcy
The majority of people file for bankruptcy as individual consumers rather than businesses. It is possible to file for bankruptcy as a business owner, of course – but it can be complicated and requires some extra steps. This is where it’s especially helpful to have someone like Attorney David Brunelle on your side.
Ready To File?
In today’s economy, more people than you might expect are filing for bankruptcy. If you’re considering this big choice, call the law offices of David Brunelle or email david@davidbrunellelaw.com.