When saddled with a mountain of debt and bills to pay, most people start thinking about their options. Some will consider bankruptcy. And, according to a new FindLaw.com survey, about 1 in 8 Americans, or approximately 13% of us, have either contemplated or filed for bankruptcy.
The survey finds that age is a factor. Those between the ages of 35 and 54 were 50% more likely to have considered for bankruptcy than those between the ages of 18-34 or 55 and older.
In fact, in the past year around 1.5 million Americans have filed for bankruptcy, according to the National Bankruptcy Research Center. Bankruptcy can help reduce debts and assist people in their time of need. But, when filing for bankruptcy - or considering filing for bankruptcy - there is a whole host of questions that you need to address.
If you're among that 13% that have considered bankruptcy, you should consider the types of bankruptcy filings that are available. Chapter 7 bankruptcy, or liquidation, essentially hands off your belongings to a trustee who then liquidates your assets in order to discharge debts.
There is also Chapter 13 bankruptcy, often considered more preferable to Chapter 7 bankruptcy, because it allows the debtor to retain some personal assets - such as a house - and work out a repayment plan to debtors over the course of 3-5 years. In order to quality for chapter 13 bankruptcy, you need to have some source of personal income.
All of these filings are under federal regulation. Instead of appearing in state or federal court, you would need to deal with federal bankruptcy courts.
Individuals who consider bankruptcy can also try other debt management solutions like credit counseling - and they should really think about contacting a financial advisor or consulting a bankruptcy attorney who can explain the legal ramifications of declaring bankruptcy. If you are that 1 in 8 people from the FindLaw.com survey, being informed of your options and the consequences of filing for bankruptcy are vital for your financial health.