How many people filed bankruptcy in 2009?
The numbers are not surprising being the troubled economy we had in Texas and in the country in 2009. The estimates first noted about 300 million people lived in the U.S. in 2009. Of those, about one in 300 individuals filed bankruptcy. That means over 1 million people filed for bankruptcy in 2009 (some estimates at about 1.1 million).
It’s hard to estimate exactly how many filed in each state, but there are already some projections saying 2010 will have even more bankruptcy filings.
Why are so many people filing for bankruptcy?
The statistics vary on this particular issue. The clear result of bankruptcy is not being able to pay off debts; that’s the leading factor involved in bankruptcy. Surprisingly, foreclosure because of subprime mortgages or other reasons was not the main reason bankruptcy was filed. As noted in, “Leading Causes of Bankruptcy,” medical bills were a key reason for bankruptcy.
Foreclosure Rates
How many homes were foreclosed upon in 2009? Real numbers are hard to find, but the rates in 2008 said 861,664 families lost their homes. The numbers were up last year.
Why are medical bills so problematic?
Chapter 7 bankruptcy was used in the majority of bankruptcy filings in 2009. Why? Medical bills can sometimes get out of hand. And the best way to eliminate some if not all medical bills is Chapter 7 bankruptcy.
The problem stems from families with little to no insurance being given extremely high medical bills. Consider that a family member has a major heart condition or other problem which calls for a hospital stay, and this person is not covered in any way or has minimal coverage and has to pay out of pocket.
The costs over days of staying in a hospital, tests, and operations are incredibly high. It’s scary for families, but one solution is filing for Chapter 7 bankruptcy. Chapter 13, which does not eliminate debt, can also be used.
What are other causes of bankruptcy?
If you fear your car or another valuable asset may be repossessed, you can also file for bankruptcy to save it. If you just lost your job and had to pay bills with your credit card to live, you might have high debt and few options. There are countless reasons to file bankruptcy, but what are the key advantages?
Benefits of Bankruptcy
Clearly, bankruptcy is not for everyone and there are some alternatives such as consulting with those you owe money to. In this case, you might be able to negotiate. However, Chapter 7 bankruptcy is a good option if you have high medical bills, credit card debt, or other debts (some you can’t eliminate, such as taxes). You should know that with Chapter 7 bankruptcy, you may lose your home. Chapter 13, which is essentially a repayment plan designed to buy you time to pay bills, is in fact the better options if you want to keep your home.
Chapter 7 or Chapter 13?
It’s pretty clear that each have their own advantages and disadvantages.
Chapter 7: You can eliminate most debt, but you can lose assets
Chapter 13: You can save your home from foreclosure and car from repossession, but you have to pay back the bills over 3-5 years.
If you are really interested in this process, consult with a professional bankruptcy attorney in your area.
