If you are struggling to make ends meet, you are not alone. The American Bankruptcy Institute (ABI) reports that there were 26,195 filings for relief through bankruptcy in January of 2022 alone.
Is bankruptcy common?
We know that bankruptcy is not uncommon, but it helps to take a closer look and get a better understanding of how common bankruptcy is in your area.
The most recent analysis of bankruptcy trends in Ohio involves a review of the data from 2010 through 2019. Based on these numbers, our state has seen a slight uptick in bankruptcy filings. The ABI also reports that Ohio ranks high when researchers review the rate of bankruptcy filings in a state compared to its population. According to their findings, Ohio’s filings as compared to their general population is 35% above the national average.
Didn’t bankruptcy filings decrease in 2021?
This is true, but experts predict bankruptcy rates will jump again in the near future. They point to federal funding helping struggling businesses and individuals during the pandemic as a reason for the drop, but warn that the drop is not reflective of the financial struggles faced by Americans throughout the country now.
What should I do if I am considering filing for bankruptcy?
In many cases, bankruptcy can offer a fresh financial start. The first step in filing is to review the two most common types of bankruptcy to get a better idea of your options.
Chapter 7 bankruptcy is essentially a liquidation of assets to help pay off qualifying creditors. Once complete, most remaining debt is essentially forgiven. It is important to note that those who file for relief through Chapter 7 do not lose all of their assets. Certain assets are exempt and can include the family home and vehicle.
In contrast, a Chapter 13 bankruptcy, as discussed in more detail in a previous post available here, results in a more manageable repayment plan generally spread out over a couple of years.
Those who are considering filing a petition for bankruptcy are wise to review their options with legal counsel.