Monday, March 3, 2014

2013 Bankruptcy Filings & Reasons People File

The 2013 bankruptcy statistics reveal that 706,499 people filed Chapter 7 bankruptcy and 330,899 people filed Chapter 13 bankruptcy for non-business consumer debt.  These numbers make up bankruptcy petitions received, terminated, and pending by the U.S. Bankruptcy Courts and reported to the Administrative Office of the U.S. Courts. 

Some of the top reasons people file bankruptcy are:

To stop a foreclosure.    Some people file to save their home from foreclosure if they are behind in their mortgage payments.  They are able to design a Chapter 13 plan that will allow them to get caught up on back mortgage payments.

To stop a repo.  Again, some people are able to design a Chapter 13 plan that will allow them to get caught up on back car note payments or even lower their existing car note.

To eliminate IRS taxes. You may can discharge older tax debts in a Chapter 7 filing.  (Consult with a bankruptcy attorney.)  Chapter 13 bankruptcy can allow you to pay back the debt over 3-5 years.

To eliminate credit card and other unsecured debt.  You may be able to discharge your credit card and other secured debt when filing a Chapter 7.  (Consult with a bankruptcy attorney.)  If you file a Chapter 13, you will pay back a portion of your debt through a court approved payment plan.

Overwhelmed with medical debt.  Medical debt can increase quickly when an unexpected accident or illness occurs.  It can put a strain on your finances if you don't have insurance or under-insured.

Loss of employment.  Let's face it, a job loss can be a devastating blow to anyone.  Some people exhaust all of their savings to keep up with bills while others don't have a savings at all.

Stop harassing phone calls from creditors.  When you are in a bankruptcy, creditors may no longer contact you by phone or by mail.  This is the benefit of the "automatic stay".

Lawsuits, judgments, garnishments.  Filing bankruptcy will most likely stop any collections, judgments and garnishments.  (Consult with a bankruptcy attorney.) 

To get a fresh start!  Are you drowning in debt, facing foreclosure, or suffering from a severe financial setback?  Bankruptcy can help you get a second chance at reclaiming your financial independence. 

Take a look at the infogram below outlining the number of filings in the state of Virginia compared to the number of filings in all 50 states.

DISCLAIMER: @AfterHoursVA is NOT a law firm, nor am I an attorney. I do not provide legal representation or advice. If you need legal advice, please consult an attorney. @AfterHoursVA is a debt relief agency.

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