Bankruptcy is generally viewed negatively, and these feelings aren’t completely unfounded because it is a sign of financial distress. However, bankruptcy is a tool that can be used to provide a fresh financial start under the right circumstances, and there are many ways to find yourself in a situation where bankruptcy is the best option without being financially irresponsible. Virtually everyone is just one unexpected life event away from the possibility of bankruptcy. Just look at the numbers:
Top causes of bankruptcy:
- Overextended on credit
- Unexpected expenses
- Reduction of income
- Job loss
- Illness or injury
Who files for bankruptcy?
- The huge majority are employed — more than double unemployed, retired, homemaker, and student combined
- Over half are between ages 35 to 54 — not young and irresponsible
- Men and women — the gender split is now nearly 50/50
- Married couples make up nearly two thirds of bankruptcy filings (and half of the overall population)
How frequent are bankruptcy filings?
- Over one million cases per year from 2009 to 2013
- A high of 1,571,183 in 2011
- Seven states have six or more bankruptcy filings per 1,000 people
- Just six states have less than two filings per 1,000 people
No matter how common bankruptcy may be, it still carries long-term consequences and is not a decision that should be taken lightly. Before deciding to file for bankruptcy, consult with an experienced bankruptcy attorney to discuss the available alternatives, if bankruptcy will be able to discharge your debts, and what your financial outlook will be as you exit bankruptcy.