Some people are embarrassed about bankruptcy, but looking at the stats, it’s not that uncommon. Nor is it something to be ashamed of. The number of bankruptcies has increased over the last century, especially since 1980.
The record high for bankruptcy filings started in a year was in 2005, when more than two million bankruptcy cases were started. You might have known someone who filed for bankruptcy that year: one household in 55 filed.
This is why bankruptcy is not seen by creditors the same way anymore. If they were to deny credit based on a bankruptcy on someone’s credit report, they would lose out on thousands of dollars! For example: people can still get a home loan just two years after a Ch7!
Businesses aren’t the primary filer of bankruptcy, either. They account for about 3% of filings, down from around 13% in 1980.
17% of the bankruptcies filed in 2011 were right here in California. The 240,151 cases filed here were the most of any state that year, followed by Florida with 94,815.
Bankruptcy isn’t usually the result of money mismanagement. In 2005, that record bankruptcy year, 46% of bankruptcies were related to medical issues. That has since fallen, though medical bills or lack of work due to an illness or injury are still a significant cause of bankruptcy. Other top factors are divorce, reduced income, joblessness, debt and unexpected expenses.
Bankruptcy isn’t just for the rich, either. The average filer for bankruptcy makes under $30,000 a year, is married and has a high school education. More people aged 55 and over are filing than before, while fewer people under 25 are filing.
The point in all of this is to not be ashamed of filing for bankruptcy. It’s not an easy process and not one to take lightly, but if you decide to do it, know that you’re not the only one.
If you want to discuss whether bankruptcy is a viable option for you, contact us at the Seneca Law Group at (619) 630-8LAW (8529).