When debts and other monthly payment obligations become too much to handle, it can seem like you have limited options for how to make ends meet. Filing for bankruptcy is one such option, but the word itself carries somewhat of a negative connotation in casual conversation.
Misconceptions surrounding bankruptcy are easy to clear away by understanding more about the process and how people actually perceive it. You can make better decisions regarding whether or not to file bankruptcy by familiarizing yourself with some key statistics on the subject.
Bankruptcy filings are in a downward trend
The United States Courts report that bankruptcy filings for the year 2021 are down 24 percent from the previous year. The decrease to 413,616 filings for 2021 is part of a larger downward trend over a five-year period, as evidenced by the contrast of 789,020 filings in 2017. Consumers can interpret this trend to indicate that people are struggling even to file for bankruptcy.
Consumers file the vast majority of bankruptcies
Government reports also show that business filings only number 14,347 for the year 2021, just over three percent of total annual filings. This exemplifies the reality that bankruptcy for individual consumers is an increasingly valid and acceptable method for debt relief. Chapter 7 and Chapter 13 are the most common forms of consumer bankruptcy, and choosing the right one is a matter of evaluating your current circumstances.
Turning to bankruptcy as a debt relief option is not a shameful option, but it is one that costs extra money in the form of a filing fee and that can alter your financial situation going forward. When debts start to get out of hand, it is good practice to consult with a bankruptcy expert as early as possible so you can understand your options.
