Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “How do I file for bankruptcy?”
Conventional wisdom tells us that personal bankruptcy filings are usually related to big-ticket expenses, often medical debt, that wipe out a family’s savings. While it is certainly true that medical debt and hospital bills can force families into bankruptcy, a recent study conducted by the Center for Consumer Recovery found that other factors figured more prominently into bankruptcy filings than many experts assumed.
One major driver of personal bankruptcy in the United States is litigation. According to the survey, 78 percent of all bankruptcy filers who were interviewed say that the filing of a lawsuit against them was the final straw that pushed them into bankruptcy court. Of those interviewed, only four percent blamed the bankruptcy filing on the volume of their debt. The survey results indicate that it isn’t the amount of debt held by consumers that is unsustainable, but instead the pressure many consumers feel when they are under the threat of a lawsuit that leads them to file.
Debt buyers are another unexpected source of bankruptcy. According to the survey, these debt-buying companies operate by paying banks pennies on the dollar for old debt and then aggressively going after consumers for the full amount owed. Studies show that bills owed by these debt buyers figured into 74 percent of all bankruptcy filings that were analyzed by the group.
Finally, the Center for Consumer Recovery says that credit card debt actually plays a much larger role in personal bankruptcy filings than many people believe. Though medical debt receives the most attention, it was far more likely that a bankruptcy filer was trying to escape credit card debt than hospital bills. The survey showed that the largest category of debt reported by filers was credit card debt. This credit card debt accounted for nearly three-quarters of all debt listed in the filings. The second largest category of debt was medical debt, which amounted to 21 percent of the total debt.
The group behind the survey says that the results lead them to believe that continued unemployment and increasingly aggressive debt collectors who respond to unpaid bills by filing suit are the leading causes of personal bankruptcy filings. With creditors becoming more and more aggressive, the group says that they expect the number of bankruptcies to increase, as many people are unable or unwilling to tolerate the stress and tension created by a lawsuit.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.
About The Author:
Bryan Stone is a Partner with Arnold & Smith, PLLC where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord tenant issues. Originally from Macon Georgia, Mr. Stone attended the University of Georgia for a BBA in Banking and Finance and went on to Wake Forest to earn his law degree. After law school Mr. Stone relocated to Charlotte where he has become quite involved in many local organizations. He is currently the Chair of “Bravo!” the young professionals organization of Opera Carolina, he also founded the UGA Alumni Association of Charlotte. In his spare time he enjoys perfecting his BBQ skills for the annual “Q-City BBQ Championships” and playing softball with the Mecklenburg County Bar Softball League.
“Reasons for Bankruptcies? They’re Not What You Think,” by Brian O’Connell, published at TheStreet.com.
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