Filing bankruptcy is often the only option for many when their debt becomes out of control and creditors offer no feasible solution. Sudden unemployment, serious health problems, and other issues associated with the stagnant economy are the top reasons why hundreds of thousands of consumers file bankruptcy every year.
According to the American Bankruptcy Institute, over 800,000 bankruptcies were filed in the U.S. in 2015, with approximately 9,000 of those bankruptcies being filed by Arkansas residents. Filing bankruptcy can give you a chance to erase your debt, take charge of your finances, and restore your peace of mind. Additionally, once you file for bankruptcy, debt collectors can no longer call and harass you about your debt. If you have any questions, the first step should always be to consult a bankruptcy attorney in Arkansas.
Filing Bankruptcy Today: What You Need to Know
In almost any other type of case, most people do not like becoming a “statistic.” However, the statistics on bankruptcy filings in Arkansas may surprise you. The stigma surrounding filing bankruptcy is one that prevents many from seeking it, but the truth is that you are not alone and the process can be forgiving for those looking to make a real change in their financial standing.
- The vast majority of people filing bankruptcy today are individuals, not businesses. In 1980, companies accounted for about 13% of all bankruptcies. Now, only 3% of entities filing bankruptcy are business owners.
- Nearly 50% of bankruptcies are filed because the consumer cannot afford to pay for serious medical issues due to insufficient insurance coverage or lack of insurance. In addition, those suffering accidental injuries or chronic diseases often lose their ability to remain employed, which further compounds their financial difficulties. The other 50% of bankruptcies filed are due to job loss, divorce, credit debt, or reduced income.
- The average consumer who files for bankruptcy today is older (over 45), married, has a high school diploma, and earns around $30,000 a year. In fact, 20% of those filing bankruptcy today are over 55 years old. The number of bankruptcy filers under 30 years old has been steadily decreasing since the 1990s.
- When someone files bankruptcy because of medical debt, that debt is typically $5,000 or less. About 13% of medical debt bankruptcies involve amounts over $10,000. Although these debts are not extreme, the medical bill collection process is infamous for resisting implementing reasonable repayment plans. Consequently, filing bankruptcy is the only way many patients owing money on their medical bills can stop debt collectors from harassing them.
- According to U.S. Courts statistics, 91% of Americans filing bankruptcy will hire an attorney to assist them in filing a Chapter 7 bankruptcy petition.
- Last year, 6,612 people living in the Eastern Division of Arkansas filed bankruptcy. Of those 6,612, 2,779 filed for Chapter 7 bankruptcy while 3,818 filed for Chapter 13 bankruptcy.
- Last year, 3,288 people living in the Western Division of Arkansas filed bankruptcy. Of those 3,288, 1,781 filed for Chapter 7 while 1,478 filed for Chapter 13 bankruptcy.
- Approximately 213 businesses filed for bankruptcy in Arkansas in 2015. 9,685 consumers filed for bankruptcy in Arkansas in 2015.
- Consumers who file bankruptcy are better off 5 to 10 years afterward than those who continue struggling with debt. In fact, more people have full-time employment a few years after filing bankruptcy than those who do not file.
- Bankruptcy can help restore or even increase your financial stability. Many famous people have survived bankruptcy and gone on to accumulate enormous wealth. For example, talk show host Larry King filed bankruptcy nearly 40 years ago and is now estimated to be worth at least $150 million. Founder of Ford Automotive Company Henry Ford filed for bankruptcy over 100 years ago. By 1947, he was worth nearly $2 billion.
Filing bankruptcy can impact your life in a number of positive ways if you do so correctly. If you are having trouble finding financial stability, contact an Arkansas bankruptcy attorney at Nolan Caddell Reynolds today by calling 866-242-0452.