Facts about Personal Bankruptcy
When it comes to filing for personal bankruptcy, you might feel like you are alone in a sea of financially solvent people. Thanks to misinformation and myths floating around about what bankruptcy means, many people who file often feel like they have “done something wrong” or are just “incapable” of handling their money. However, the cold, hard facts about personal bankruptcy present a different picture altogether.
Whether you’re considering filing or you’ve just made your first appointment with your bankruptcy attorney, consider these reassuring facts about personal bankruptcy:
The Average Debt Amount Is Significant
If you believe that you are the only person who has accumulated such a mountain of debt, think again: the amount of debt that is carried by the average person filing for bankruptcy is equivalent to 1.5 times their annual salary. For example, if you make $40,000 per year, this means that you may have approximately $60,000 in debt.
While this might not seem like a vast amount of money to be in debt – especially when compared to your mortgage – the point is this: bankruptcy becomes an option when it’s no longer possible to pay back debts on your salary. Therefore, if your debts outweigh your annual salary and you’re still throwing money at it, it may be time to go ahead and file for bankruptcy.
The Average Bankruptcy Individual Is There Because Of Circumstance
For some reason, society has perpetuated the idea that filing for bankruptcy is an admission that you have been irresponsible with your money. However, the reality about personal bankruptcy paints another picture altogether. The truth is that the average bankrupt individual has been reduced to filing due to a job loss, or a medical emergency. In fact, up to 60% of all bankruptcies are caused by medical bills. If you previously ascribed to the belief that all bankruptcies were caused by irresponsible financial behavior, it’s clearly time to rethink this belief.
Most Bankrupt Individuals Have Made Faithful Repayments
Contrary to popular belief, the average bankrupt individual isn’t filing as an “easy” way out of their financial obligations. In fact, many bankruptcy attorneys report that their clients struggle to make faithful repayments on their debts for years before realizing that they are never going to get ahead.
As you can see, filing for bankruptcy means changing the way you perceive many cold, hard facts about personal bankruptcy.