Every year, hundreds of people in Minnesota and around the country file for bankruptcy. Bankruptcy can have a drastic impact on your credit score, but for many people, it’s their only chance to get out of debt and get their finances back in order. Here are some statistics on the number of people filing for bankruptcy in 2020.
What are the current trends for bankruptcy filings?
A March 2020 report revealed that bankruptcy filings have gone down in recent years. Bankruptcy filings have been steadily decreasing since 2010.
Chapter 7 filings are the most common since this type of bankruptcy allows you to discharge most of your debts while filing for Chapter 11 or Chapter 13 requires you to pay back your debts over a period of time. The number of Chapter 11 and Chapter 13 filings has been slowly increasing.
The study also revealed that loss of income is the top reason that people file for bankruptcy. Medical expenses come in second with mortgage payments coming in third. In a survey conducted by the researchers, only 15% of Americans said that they had enough savings to pay their bills for three to six months if they lost their job. This suggests that the majority of Americans don’t have enough savings to protect them from major financial emergencies.
The number of bankruptcies in the United States rose steadily from 1985 to 2005 until the Bankruptcy Abuse Prevention and Consumer Protection Act was passed in 2005. After that, the number of bankruptcies dropped sharply. It rose again until 2010, and bankruptcy filings have been declining ever since.
Are you thinking about filing for bankruptcy?
Bankruptcy can be a long, challenging process that comes with a set of rules and regulations. Hiring an attorney may make the process much easier. An attorney may guide you through the process and make sure that you do everything right the first time.
Once you’ve filed for bankruptcy, creditors will no longer be able to harass you. You may be able to either pay off your debts or get them discharged so that you can start over with a clean, debt-free record.