An average of over 1.5 million Americans file for bankruptcy every year, according to United States bankruptcy court statistics. In 2014, for example, 97% of these were personal filings while 3% were business. In hierarchical order, California, Florida, Illinois, Georgia, and Ohio had the most bankruptcy filings during 2014.
Common Reasons for Filing Bankruptcy
There are a number of reasons why Americans choose to file for bankruptcy. Approximately 15,000 of these cases are filed every year due to student loans, according to recent statistics.
Medical expenses also account for a considerable number of bankruptcy filings. A Harvard Study found that this was the case with 62% of bankruptcies filed on an annual basis.
Using credit cards rather than cash to pay for purchases can also contribute to bankruptcy filings. This is often the case because approximately 75% of people in the United States live paycheck to paycheck, and 27% of Americans don’t have any savings.
Financial experts will often recommend that people have at least 6 months worth of expenses saved up for emergencies. Less than 1 in 4 Americans, however, do have sufficient savings.
Given that the average household has 13 credit cards, using these on a regular basis adds up. In fact, the typical credit card purchase tends to be 112% higher than if cash were used to buy these products or services. When households use credit cards in excess in order to pay for living and other expenses, this can place them in a financial predicament.
The Benefits of Working with a Bankruptcy Attorney
When someone needs to file for bankruptcy, having legal representation can make a significant impact on the outcome. It’s been shown that the success rate with Chapter 7 bankruptcy is over 95% when being represented by an attorney. This is compared to a 60% success rate when an individual represents themselves in bankruptcy court.
The success rate when working with an attorney for a Chapter 13 case is 55%. When individuals represent themselves, however, the success rate is approximately.04%.
Costs Associated with Filing Chapter 7 and 13 Bankruptcies
On average, Chapter 7 bankruptcy cases will cost between $1,500.00 to $3,000.00. Chapter 7 filing fees cost $335.00, while Chapter 13 cases cost $310.00 to file.
Since bankruptcy attorneys are experienced in this area of the law, they are able to provide counsel during this challenging time. Filing for bankruptcy may seem to be a daunting process to the uninitiated. When you work with professional attorneys rather than attempting to represent yourself, there is a greater chance for a successful outcome. Furthermore, attorneys will also be able to explain your rights and responsibilities under bankruptcy in a manner which you will be able to understand.