Bankruptcy Statistics

Author: Mercy Maranga

During these harsh economic times more and more people are filing for bankruptcy. Once frowned upon, it is now a common option for individuals with unmanageable debt. This is despite the fact that the laws have made it more difficult to file for bankruptcy. Plus let’s not forget the implications and the cost of filing for bankruptcy. Bankruptcy statistics clearly show there is an increase in large proportions of individuals filing for bankruptcy.

These statistics are normally complied by the administrative office of the U.S. courts. They are done quarterly with each quarter ending December, March, June and September. According to bankruptcy statistics released earlier this year, chapter 7 filings have increased 43%. Also on the increase are non business bankruptcies which have risen 31%.  On the other hand business bankruptcies have risen 54%. This increase is blamed on the fact that we are a society that is hooked on material things even when we have the inability to cater for them. If by some misfortune we are caught by an emergency that needs financial resources, we get into debt while trying to come up with the money.

This digs us into a hole that is very difficult to get out of. Most families that usually file for bankruptcy do so for a number of reasons. The leading cause are jobbing loss, medical problems and credit card debt. According to bankruptcy statistics, credit card debt can be avoided if people just have discipline and learn how to use cash when making purchases. It is a very easy trap to get into because you do not actually see how much you are spending at any given time and you end up spending more than you earn.

According to the demographics the average age of people filing for bankruptcy is 38 years. According to The Fragile Middle Class: Americans in Debt by Elizabeth Warren, 44% of filers are couples, 30 % are women filing alone while 26% are men filing on their own. In addition, two out of three people who have filed have suffered a job loss. The states with the highest bankruptcy rates are Alabama, Georgia, Tennessee, and Utah.

Article Source: http://www.articlesbase.com/finance-articles/bankruptcy-statistics-1170442.html

About the Author

Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts. Bankruptcy

Author: Mercy Maranga

During these harsh economic times more and more people are filing for bankruptcy. Once frowned upon, it is now a common option for individuals with unmanageable debt. This is despite the fact that the laws have made it more difficult to file for bankruptcy. Plus let’s not forget the implications and the cost of filing for bankruptcy. Bankruptcy statistics clearly show there is an increase in large proportions of individuals filing for bankruptcy.

These statistics are normally complied by the administrative office of the U.S. courts. They are done quarterly with each quarter ending December, March, June and September. According to bankruptcy statistics released earlier this year, chapter 7 filings have increased 43%. Also on the increase are non business bankruptcies which have risen 31%.  On the other hand business bankruptcies have risen 54%. This increase is blamed on the fact that we are a society that is hooked on material things even when we have the inability to cater for them. If by some misfortune we are caught by an emergency that needs financial resources, we get into debt while trying to come up with the money.

This digs us into a hole that is very difficult to get out of. Most families that usually file for bankruptcy do so for a number of reasons. The leading cause are jobbing loss, medical problems and credit card debt. According to bankruptcy statistics, credit card debt can be avoided if people just have discipline and learn how to use cash when making purchases. It is a very easy trap to get into because you do not actually see how much you are spending at any given time and you end up spending more than you earn.

According to the demographics the average age of people filing for bankruptcy is 38 years. According to The Fragile Middle Class: Americans in Debt by Elizabeth Warren, 44% of filers are couples, 30 % are women filing alone while 26% are men filing on their own. In addition, two out of three people who have filed have suffered a job loss. The states with the highest bankruptcy rates are Alabama, Georgia, Tennessee, and Utah.

Article Source: http://www.articlesbase.com/finance-articles/bankruptcy-statistics-1170442.html

About the Author

Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts. Bankruptcy

Most people who file for bankruptcy choose Chapter 7 instead of Chapter 13 because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 bankruptcy usually takes the least time to complete. The process is over in about 4 to 6 months, commonly requiring only one trip to the courthouse by the person filing for bankruptcy to emerge debt-free.

However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. If you remaining income after subtracting what you will spend on certain allowed expenses and monthly payments for child support, tax debts, secured debts such as a mortgage or car loan, and a few other types of debts is sufficient to support the payment under chapter 13 repayment plan, then, you will not allow to file bankruptcy under chapter 7.

Check Your Eligibility Criteria

The first step to check your eligibility of filling chapter 7 bankruptcy is to measure your average income for past six months against the median income for a family of your size in your state.

Once you have calculated your income, compare it to the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information). If your calculated average income is less than or equal to the median income of your state, you can file under chapter 7 bankruptcy, else you need to go through another eligibility test, called "Mean Test".

The "Mean Test" based on the outcome from calculated disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, you subtract both of the following:

Certain allowed expenses such as clothing, transportation, food and so on; in amounts set by the IRS (Note that this amount may be lower than your actual spending).

Monthly payments you will have to make on secured and priority debts. Secured debts such as mortgage and/or car loan; priority debts include child support, alimony, tax debts, and wages owed to employees.

If your total monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7. If your total disposable income is more than $166.66 then your will automatically force to Chapter 13 unless your have a solid reason with proven facts that you are facing a special circumstances that aren't reflected in the calculations above. You may be allowed to file under chapter 7, but this is a case by case basic.

What if you disposable income fall in between $100 and $166.66? If your disposable income is in this range, you must figure out whether what you have left over is enough to pay more than 25% of your unsecured, non priority debts such as credit cards, student loans and medical bills. If not, you pass the means test, and Chapter 7 remains an option else you have flunked the means test, and will be prohibited from using Chapter 7.

Summary

You may like most of people prefer to fill the bankruptcy (if this is the option left for debt free) under chapter 7, because it doesn't require you to repay any portion of your debts, as Chapter 13 does. But first thing is your must be eligible and meet the requirement for chapter 7 to opt for this option.

Cornie Herring is the Author from "StudyKiosk-Credit Basics"- http://www.studykiosk.com/creditbasics. "StudyKiosk-Credit Basics" is an informational website on credit basics, debt consolidation and bankruptcy.

According to the U.S National Library of Medicine and the National Institutes of Health Medline dictionary the word

When individuals or businesses are facing financial difficulties and inhibiting debt they may seek to obtain relief through the legal process of bankruptcy. A person may file for Chapter 7 bankruptcy and be able to eliminate all or part of the debt. However, they may choose to file for Chapter 13 which stretches out the payments on existing debts.

The process of filing for bankruptcy is also designed to provide protection from creditors. In this case, secure creditors have the assurance of being reimbursed because they are able to hold a lien on property. Thus, this option of payment is likely to be more accepted. Most creditors cannot attempt to collect any form of payment from you while the bankruptcy case is pending. Any discharged or excused debts are also unable to be collected from creditors. However, it's best to understand that not all debts are discharged.

Approximately 90 percent of all bankruptcy cases are caused by unemployment, medical bills, or divorce. While every situation is different the most common feature of bankruptcy is a large amount of debt incurred. The high interest rates of credit cards may also be a contributing factor.

Filing for bankruptcy is usually a last resort decisions which is made personally. The first step however, from freeing yourself from financial burden is making the best possible decision with the least bit of strain. Once this is done, you can petition the court. Basically the petition is seen as a request for protection and relief from creditors. It's only logical that you must provide some personal details such as assets, liabilities, income, and expenditures. Most often they will have had to undergo credit counseling within the allotted time.

Of course the most significant advantage to filing for bankruptcy is getting a fresh financial start. Another advantage is that after filing, most collection efforts will stop. It is also unlikely to affect your employment status. in most cases it will also end all garnishments. However, keep in mind that laws vary from state to state. Some states may even allow you to keep all equity in your home while others, may exempt a certain amount.

If filing for bankruptcy is in your future it's best to hire a bankruptcy lawyer. Use caution when associating with petition preparers, typing services, or paralegals. Filing on your own is most often not advized but should you choose to do so educate yourself on the laws and processes in your state.

The Debtor's Greatest Weapon, The Automatic Stay

Immediately when your bankruptcy case is filed, an automatic stay is created. An automatic stay is the equivalent of a restraining order that prevents creditors from taking certain collection actions against you. These collection actions include: Telephoning you at home, at work or on your cell phone; Filing lawsuits against you or continuing with lawsuits that are already in progress; Repossession attempts; Foreclosure proceedings; Wage or bank garnishments; Recording any liens or judgments; Anything that attempts to collect a debt or improve a creditor's position as it relates to you and your underlying debt.

The Automatic Stay Is Not Absolute

There are exceptions to the automatic stay, especially in the case of re-filings. Creditor actions are not stayed in the following circumstances: Criminal actions. Filing a bankruptcy case will not prevent Federal, State or local authorities from pursuing their criminal action against you. Lawsuits involving child support or spousal support are not stayed and can be pursued despite your bankruptcy filing. Actions by governmental units to enforce a police power are not stayed.

Recent Changes

There are many changes that have occurred in the area of automatic stays since bankruptcy reform generally went into effect October 17, 2005. The major changes have to do with repetitive bankruptcy filings. If you file a second bankruptcy case within one year of a prior filing, the automatic stay will only go into effect for thirty days, unless you can prove to the court that the second filing was filed in good faith. You must file a motion and have it heard before the Judge, prior to the expiration of the thirty day period. The motion can be brought against one particular creditor, or more likely, against all creditors. After notice and a hearing, the court will rule one way or another. You have the burden of proving that the second case was filed in good faith. This can be accomplished by showing a positive change in your circumstances such as higher, more stable income. Another example would be if you recovered from a serious medical condition which had previously prevented you from gainful employment. If you file a third bankruptcy case within one year of two prior filings, the automatic stay will not go into effect at all. You can attempt to invoke the automatic stay by bringing a motion, similar to the one mentioned above, showing that the third filing was made in good faith. Although not impossible, it would require a very compelling reason to convince the court to allow the stay to be imposed on a third filing within one year. In eviction cases, if the landlord has already obtained a judgment for possession prior to the bankruptcy case filing, then there is no automatic stay. You should file your bankruptcy case prior to the landlord obtaining a judgment so that the stay can go into effect. There is also no stay if the eviction is based upon endangerment of the rental property or an illegal use of controlled substances is occurring on the premises and the eviction started prior to the bankruptcy case being filed.

Mostly the loans are offered to the people who have good credit history but Signature Loans With A Discharged Bankruptcy has come up for both credit history good and bad. Such types of loans are provided on the based of signed activation letter of the borrowers. Therefore, the borrowers do not need to fax anything for this loan. People who are defaulted, arrears, late payments or bankruptcy by the country court judgments due to these reasons such people are deprived from obtaining the loans. But now, they don't think for the cash. They can apply for Signature Loans With A Discharged Bankruptcy without any hassle to progress in their credit record. Earning Signature Loans With A Discharged Bankruptcy there are few mentioned requirements which are qualified by the borrowers such as the applicant must not be less than 18 years in his age. His stipend revenue must not be less than $1000 and his active checking account must be at least 6 months old in valid bank. Having qualified these mentioned requirements, the cash will be deposited directly into the account within few hours or the next business day. These types of bad credit signature loans are granted at a bit high rate of interest. The amount can be borrowed between $500 to $15000 and carries a repayment term of 12 months to 5 years. The credit score of the borrower is the ticket for obtaining Signature Loans With A Discharged Bankruptcy. Signature Loans With A Discharged Bankruptcy can be borrowed to workout any purpose as set-up own business, bring off the medical needs, home improvement, automobile servicing, amortize the past debts, and more. Signature Loans With A Discharged Bankruptcy are availed from numerous banks and credit agencies, online. But online is the best genital tract for availing the Signature Loans With A Discharged Bankruptcy. Search well over internet, you can find a good number of lenders providing Signature Loans With A Discharged Bankruptcy. But to fulfill your requirement you are to select one the best lender, who provides you a single online application form to fulfill few identifications about yourself. After confirmation the identification the cash will be in your account automatically. Hence, Signature Loans With A Discharged Bankruptcy is proved the boon for both credit history.

Inflated Medical bills are typically caused from a health crisis or grave medical issue. If you get sick, research shows a big chance you will be faced with high medical debt. To obtain help from medical debts, you have to to learn all options to secure the correct decision. Therefore, instead don't file for bankruptcy(a bad option.You should seek medical debt resolution services/professionals and advice. There are many ways/options you can pursue to find medical bills relief and you must be cognizant of the pluses and minuses of each option.

To start, you can apply for a medical debt consolidation loan. This could be a personal loan (uncollateralized) or a home equity loan. Regardless of what you qualify for, this bank loan is taken to pay the medical debt off and it comes with interest with any other financial loan. Contrastingly, lately it is hard to obtain a loan, and even more cumbersome if your credit score is low. A bank loan is a poor option because you end up paying greater sum due to a loan's. Therefore, arduous care should be taken before taking the healthcare loan road.

Another medical debt help road is to transfer the debt to your charge card. On the contrary, pushing medical bills on to the credit card is misguided for you will be ineligible for healthcare financial assistance as it does not lower your gross earnings. Moreover, transferring medical bills onto a credit-card kills most of your feasible choices due to the fact that the medical debt form credit card mounting credit card bills. In Addition, the interest is greater with credit cards in comparison with leaving your debt with your medical care professional or seeking a medical loan.

Negotiation is an additional route and statistically has been widely effective. If you cannot handle the required lump sum pay off offered to you, you should to talk with the medical billing department authorities to reduce your medical bills and obtain a better deal

At some point almost every individual or family can experience a hardship that makes it impossible to keep up with ordinary living expenses. Loss of income, pay cut,

This year President Bush signed a bill to change the bankruptcy law. This will go into effect this October of 2005. The new bankruptcy law will make it more difficult to file for bankruptcy. This may be bad news to individuals who are drowning in debt. On the other hand it is good news to business and individuals that work very hard to maintain good credit and not suffer from profit loss.

When the new bankruptcy law goes into effect it will be harder for anyone to file for chapter 7 and chapter 11 bankruptcy. Filing for chapter 13 bankruptcy will be your most likely option.

What is Chapter 13 bankruptcy? It is an option that is given to those who have any kind of steady income. Basically, anyone who has a job. It is a payment plan and not a way to wipe a way your debt. Which means the days of wiping the slate clean are over. However Chapter 13 does protect your assets. The court devises a payment plan in which you are to pay to a trustee that is appointed by the court. Usually the payments are to be paid off in three years time. There are some exceptions, but that is up to the courts to decide.

So now that the bankruptcy law is changing what are some things people should do to avoid debt?

One very important thing is to never live outside your own means. If you have credit cards don't use them as if you will have the money every month to pay the minimum balance. Be prepared for the unexpected such as a loss of your job or loss of any other source of income. This is where some people get into trouble. Protect yourself and your assets by being insured. Some people get into debt due to unexpected medical expenses or property damage. When you don't have a way to help cover these expenses you will find your self in some kind of debt.

Try and keep some money off to the side in case some kind of unplanned expense should arise. Have some kind of back up plan to avoid the need for bankruptcy.

One of the reasons for the bankruptcy law change is because of over use of the system. There are actually some people who pre plan filing for bankruptcy as they abuse their credit cards. It sounds hard to believe, but it is true.

One may ask how this is fair to the people who didn't do anything wrong and still landed them self in debt? Unfortunately changes in the law aren't always fair to those who did nothing wrong. As the old saying goes, " It only takes one bad apple to spoil the bunch".

The only thing we can do now is become more responsible about our finances. Take more steps to avoid the need to ever file for bankruptcy.