Many people believe that bankruptcy is only for those low income families with no assets and no income. That is simply not the case! The recent recession that has plagued our country has impacted all economic groups. Case in point is a recently published survey showing that more college graduates and higher income families are turning to the federal bankruptcy laws to restructure their personal finances. This study was conducted by the Institute for Financial Literacy, a non-profit organization whose mission is to make financial literacy education available to American adults.
Over 50,000 people participated in the study which found that the rate of college graduates filing for bankruptcy has increased 20% from 2006 to 2010. Non college graduates still make up 70% of all debtors. Additionally, while only 5.5% of debtors reported income of more than $60,000 in 2006, more than 9% reported this income by 2010.
Financial distress can affect anyone, and can come quickly and unexpectedly, or slowly and predictably. Debtors in increasing numbers are citing overextended credit, reduction in income, or job loss as chief contributors to their bankruptcy filing; while fewer are pointing to unexpected expenses, death of a family member, illness and injury.
“The Great Recession has had a dramatic impact on the bankruptcy filings of American consumers across the economic spectrum — including college-educated, high-income earners,” said Leslie Linfield, executive director and founder of the Institute for Financial Literacy.
The Bankruptcy Code offers three personal bankruptcy chapters that can help you despite your income or assets. Chapter 7 is an erase-your-debts-and-start-fresh bankruptcy that discharges debt and is meant for individuals who are unable to pay anything to their unsecured creditors. Chapter 13 bankruptcy is a repayment plan that allows you to repay creditors what you can afford over three to five years. Chapter 11 is meant for more wealthy debtors who need to restructure their finances.
If you are experiencing financial trouble and need a helping hand, speak with an experienced bankruptcy attorney at Haines & Kriger, Las Vegas. Call 702-880-5554. Your attorney can discuss your bankruptcy options and propose a plan to solve your financial woes.