Contrary to commonly held beliefs about who files for bankruptcy, the average bankruptcy filer is not a free-spending celebrity or a crook trying to cheat the system, but an ordinary middle-class American. According to an analysis by Jonathan Fisher, a research scholar at the Stanford Center on Poverty and Inequality, “median income for bankruptcy filers is $42,000, which is $6,000 less than the national median.”
Many of these individuals are hard working people who are struck by unexpected problems that hurt them financially. People are laid off, hit by major illness and expenses, or have had a death or divorce in their family that changes their financial picture. Debt mounts; they may run up credit card charges in an attempt to meet their financial needs; and they are barraged with harassing calls from creditors and faced with having their wages garnished, vehicles repossessed, and loss of their home.
Bankruptcy, a legal way to have many debts forgiven, can put struggling individuals on the road to financial recovery. If you’re a good candidate for bankruptcy, filing can keep creditors from harassing you and seizing your possessions, allow debts to be discharged (forgiven), and allow you to keep your assets and begin to rebuild your life.
How do you know if bankruptcy is right for you?
The skilled and seasoned Columbus bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that money problems can happen to even the most well-intentioned people. We offer a free consultation to evaluate your financial situation and find the best way to deal with your debt. We can help by looking at your income, your debts and your goals and coming up with a plan that’s best for you.
Contact us online or call to set up your free consultation today.
A Look at the Average Bankruptcy Filer
According to Jonathan Fisher’s findings, most bankruptcy filers are:
- More likely to be employed than the U.S. as a whole
- More likely to be veterans
- Less likely to be immigrants but more likely to be disabled
- Aging faster than the U.S. population as a whole, especially those 55-64
- More likely to be black
- Likely to get divorced in the years before bankruptcy and then remarry
One of the largest causes of bankruptcy is high medical bills. Even with insurance, high co-pays and uncovered charges can mount up.
Another major source of debt is the high cost of education. About 44 million Americans owe nearly $1.4 trillion in student loans.
Credit card debt and mortgage debt are other leading causes of bankruptcy.
How Bankrutpcy Helps
Bankruptcy protection is part of the social insurance system that provides ways for individuals to get relief from unmanageable debt. The most common types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 bankruptcy discharges (eliminates) most unsecured consumer debts and is over in a few months, so you can begin rebuilding credit quickly. While you might have to sell property to help pay off creditors, there are Ohio bankruptcy exemptions that list types of property that cannot be sold.
Exemptions can include your home, clothing, cars, pensions, alimony and child support, equipment used for work (like tools) and household furnishings. If you do not own a great deal of property, your possessions may all be exempt, qualifying you for a “no asset” case, and you may be able to keep your home, car and other items from being liquidated.
Be aware that exemption laws do not protect all property, all types of debts, or all types of creditors. Some debts, including most taxes and student loans, child support, and alimony payments, are not usually discharged in Chapter 7.
Not everyone is eligible for Chapter 7 bankruptcy protection. Your income and debt will be subjected to something called a “means test” to determine whether you qualify. If you are not eligible, filing for Chapter 13 may still be an option.
Chapter 13 bankruptcy is a repayment plan, under which you can consolidate payments to repay some or all of your debt affordably over a three- to five-year period and avoid fees and fines. If you successfully complete the court-approved payment plan, the debts covered by the plan are discharged.
Contact Us for Help and Advice
The bankruptcy process is complicated, and there are many papers to file and deadlines to meet. Contact the experienced and compassionate Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer for help, information, and support. We offer a free consultation where we will evaluate your financial situation, discuss your options, and help you decide on the path to a brighter future that makes sense in your individual case.
Delaying can only make your situation worse, so contact us online or call us today for your free consultation so we can determine what debt relief solutions will work best for you.