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3 Common Bankruptcy Myths

Bankruptcy Lawyer Bryan W. Stone answers the question “Do I need an attorney to file bankruptcy?”

 

Bankruptcy is a process many people have heard of, but few know much about. Unfortunately, in cases like this, rumor and half-truths can end up being viewed as actual information. To help dispel some of the common myths regarding the bankruptcy process, it can be useful to look at specific evidence. Let’s explore some common myths and compare these myths with cold, hard facts.

 

money question Charlotte Debt Lawyer Mecklenburg Bankruptcy AttorneyMyth #1: Bankruptcies occur because of irresponsible spending

 

A common misconception is that those who file for bankruptcy do so because of their own reckless or wild spending habits. Many people assume that if you’re upside down in debt, it must be because of your own bad choices. Though it’s certainly true this can happen in some cases, it is far from widespread.

 

Studies have showing that the most common reason for filing bankruptcy is because of medical-related expenses, in fact 46 percent of all bankruptcies in a recent year were related to a medical condition. These expenses are either the result of ongoing medical problems or a sudden medical emergency, either way the result is the same, a mountain of medical bills that you were not expecting and now cannot easily repay.

 

Beyond medical bills, sudden illness or injury are also major causes of filing bankruptcy. The loss of a job can also throw an already tight budget into complete disarray and make it impossible to make ends meet. Bankruptcy can feel like the only option when you lack a reliable source of income and have mounting bills that need to be paid.

 

Myth #2: Bankruptcy disproportionately impacts poor, undereducated individuals

 

There’s a myth that bankruptcy is only a problem for lower income, undereducated individuals. This is completely incorrect and the numbers back it up. According to a recent survey, more than 20 percent of bankruptcy filers held a bachelor’s degree or higher, up from 16 percent a few years before. While 36 percent had a high school education, another 30percent had some college education. These numbers closely resemble the numbers of the country as a whole, meaning the bankruptcy process reflects the reality of American life.

 

Regarding income, though around 60 percent of bankruptcy filers have salaries under $30,000, this number is on the decline. The number of people reporting incomes greater than $60,000 has risen dramatically, from only 5% of filers a few years ago to nearly 10% today.

 

Myth #3: The bankruptcy process is routinely abused by repeat filers

 

Another common myth is that the bankruptcy process is frequently abused by frequent filers. In fact, this is a common excuse to justify new and increasingly harsh rules for filing bankruptcy, an attempt to prevent rampant abuse. The truth is far less shocking. Numbers show that only around 8 percent of those who file for bankruptcy have ever filed before. This means that 92 percent of those filing for bankruptcy are doing so for the first and only time, hardly an example of troubling abuse.

 

If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.

 

About the Author

Kyle Frost Bankruptcy Lawyer Student loan attorneyKyle Frost joined Arnold & Smith, PLLC in 2013 where he focuses his practice on all aspects of civil litigation and bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

Born and raised in upstate New York, Mr. Frost attended the University at Albany on a Presidential Scholarship, graduating magna cum laude with a double major in Political Science and Sociology.  He went on to attended Wake Forest University School of Law in Winston Salem, North Carolina.

Following college, Mr. Frost spent over a year teaching English in South Korea. He worked in a private school in Seoul developing curriculum, English programs, and educating both children and adults that were interested in learning a new language.

In his spare time, Mr. Frost enjoys homebrewing, fishing, and travelling.

 

Source:

https://www.debt.org/bankruptcy/statistics/

 

 

Image Credit:

http://www.freeimages.com/photo/100-dollar-question-1587514

 

 

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