15 Facts You Should Know About Bankruptcy

Aug 17, 2017

There comes the miserable point in every individual or business’s life when they become so penniless that they’re unable to pay off their debts. This stage of hopelessness is called bankruptcy and a common practice, in this case, is to petition the courts to get some of this loan off your back. However it isn’t as simple as submitting a bunch of documents in court and getting the creditors off your back. There are some shocking facts you should know about bankruptcy laws.

1) You are entrusting your entire case in the hands of a judge. This person obviously does not know much about you – but you are expected to submit to their ruling.
2)  There are six types of bankruptcy, but Chapter 7 and Chapter 13 are the most often used by businesses. The former type is also known as liquidation bankruptcy because some of your assets are sold by your court to pay off your creditors. If your debts do not exceed a certain amount, you could have part of it forgiven, after paying a portion of it by reorganizing your finances, and this is where Chapter 13 comes into play.
3) The most common reason people file for bankruptcy is outstanding medical expenses. Other common reasons include loss of job, injury and even divorce.
4) The average salary of individuals filing for bankruptcy is less than $30,000. This amount is very short of the median salary earned in the US which is $70,000. No one is safe from financial troubles however, since it is common for families earning in the six figures to also file for bankruptcy.
5) The average age of bankruptcy seekers is around 35-50 years old. Those younger than 25, only account for 2% of bankruptcy cases.
6) 8% of all bankruptcy cases have been filed by individuals who have previously gone bankrupt in the past.
7) Most debtors are married while only 17% of bankruptcies are filed by single individuals.
8) Around 80% of those who filed for bankruptcy did not possess a bachelor’s degree.
9) Bankruptcy cases have been shrinking in the past few years. In 2016, there were 800,000 cases. The highest figure however was in 2010, when there were around 1,600,000 bankruptcy cases.
10) Bankruptcy is not used as an indicator of economic success since both ends of the spectrum, rich and poor, are affected by financial hurdles.
11) Just because you have a graduate degree does not guarantee immunity from financial hurdles. In fact, 17% of degree holders, both at the graduate and undergraduate level filed for bankruptcy.
12) The biggest reason why most families go bankrupt is because they spend more than they earn.
13) The gender and color of your skin has no impact on your financial integrity. Everyone gets affected equally.
14) Chapter 7 will not get you off your student loans and taxes.
15) If the debts are sufficiently high enough, your creditors can force you to go bankrupt requiring you to pay off your debts by sticking to a fixed schedule.

Choose an affordable bankruptcy advocate You should have access to the best legal help available and by choosing The Law Offices of Michael L. Kellogg, Inc. that’s exactly what you’ll receive.