Bankruptcies are sometimes seen as a last resort and something that people try to avoid at all costs. They are almost seen like an evil in this society, even though bankruptcy laws are a helpful protection for both consumers and businesses. They’re actually very common.
In July, the United States Courts released information on the total number of bankruptcies in the United States this year. Personal and business bankruptcies have fallen by 11.8% between June 30, 2019, and June 30, 2020, but since the economy is in a downturn, there is expected to be a gradual uptick in filings over the following few years.
In 2020, Alabama has had the greatest number of personal bankruptcies, and southern states have a higher average number of bankruptcies when compared to the rest of the country.
Who is most affected by bankruptcy?
Generally speaking, lower-income debtors are more likely to go into bankruptcy. It’s more likely for those who earn under $30,000 annually to file for bankruptcy.
Racially, most people file for bankruptcy at similar rates. However, for Chapter 13 bankruptcies, it’s more common for African Americans who are more likely to file.
In 2018, there were 461,897 people who went into Chapter 7 bankruptcy. Chapter 13 bankruptcy was filed by 288,272 people. Overall, it’s more likely for people to file for Chapter 7, at a rate of 61.49% in that year. In fact, it’s the most common kind of bankruptcy for debtors to use during any year on record.
If you’re struggling with your debt, don’t think that bankruptcy is going to ruin your life. There is a good possibility that choosing bankruptcy will help you get control of your finances again and move forward more successfully in the future.