U.S. residents cite many reasons for avoiding or putting off a chapter 7 or 13 bankruptcy. Examples include:
- They think it will worsen their circumstances
- They feel ashamed of their debt
- They still believe they will overcome their debt
- Bankruptcy costs too much
However, recent statistics concerning U.S. bankruptcies reveal that more people are willing to take a chance on this proven way of overcoming debt.
Myth-busting bankruptcy statistics
When asked, many say that reckless spending is the top cause of bankruptcy filings. It may surprise you to learn that only a mere five % of filings arise from reckless spending. Another misconception centers on education, with most believing only poorly educated people file bankruptcy. On the contrary, 20% of those who seek debt relief through bankruptcy are well-educated.
Here are some more surprises:
- Some feel that only high earners can afford to file a bankruptcy. To the shock of many, about 60% of filers earn no more than $30,000 annually.
- If you believe more women than men file for bankruptcy, prepare to be shocked. Men are responsible for 52% of American bankruptcy filings.
- You might think reckless credit card debt is a top reason for bankruptcy. While it is a cause, medical debt is the reason for 62% of personal bankruptcies.
- Finally, many think most people filing for bankruptcy are single (perhaps with only one income). The statistics contradict this belief by showing that 64% of filings occur within the married population.
What’s the takeaway?
The statistics discussed here show that people of all statuses and income levels have been in your shoes, and there is no need to feel shame. Learning more about New Jersey bankruptcy proceedings is another way to determine if it is the right solution for you.