Contrary to commonly held beliefs about who files for bankruptcy, the average bankruptcy filer is not a free-spending celebrity or a crook trying to cheat the system, but an ordinary middle-class American. Many of these individuals are hard-working people who are struck by unexpected problems that hurt them financially.
People are laid off, hit by major illnesses and expenses, or have had a death or divorce in their family that changes their financial picture. Debt mounts; they may run up credit card charges in an attempt to meet their financial needs; and they are barraged with harassing calls from creditors and faced with having their wages garnished, vehicles repossessed, and loss of their home.
How Do You Know If Bankruptcy Is Right for You?
Bankruptcy, a legal way to have many debts forgiven, can put struggling individuals on the road to financial recovery. If you’re a good candidate for bankruptcy, filing can keep creditors from harassing you and seizing your possessions, allow debts to be discharged (forgiven), and allow you to keep your assets and begin to rebuild your life.
The skilled and seasoned Columbus bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that money problems can happen to even the most well-intentioned people. We offer a free consultation to evaluate your financial situation and find the best way to deal with your debt. We can help by looking at your income, your debts, and your goals and coming up with a plan that’s best for you.
Are you thinking about filing for bankruptcy in Ohio? We can help. Call 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) to schedule a consultation with one of the experienced Ohio bankruptcy lawyers at Fesenmyer Cousino Weinzimmer.
A Look at the Average Bankruptcy Filer
According to the IRS, bankruptcy filings rose by 16.8% in the U.S. in 2023. The current state of the economy has made it increasingly challenging for individuals to keep up with payments that were manageable just a few years ago.
Bankruptcy filings don’t directly track statistics about bankruptcy demographics, such as gender and race. However, researchers can use contextual data to get a better idea of who’s filing. For example, one study found that Chapter 13 bankruptcy filings are often higher in zip code areas with predominantly black residents. Taking a look at the average bankruptcy filer in the U.S. can help you gauge where you fall on the scale. Data on recent bankruptcy filings shows:
- Income loss, medical bills, and mortgages are the leading causes of bankruptcy.
- Chapter 7 filings have increased by 34.25% in 2024.
- Chapter 13 filings have increased by 16.18% in 2024.
- 434,064 people filed for non-business bankruptcy in 2023.
- Increasing numbers of people aged 65 and up are filing bankruptcy.
One of the largest causes of bankruptcy is high medical bills. Even with insurance, high co-pays and uncovered charges can mount up. According to a recent government study, Americans owe around $220 billion in medical debt. Another major source of debt is the high cost of education. About 43 million Americans owe over 1.7 trillion in student loans. Credit card debt and mortgage debt are other leading causes of bankruptcy. American consumers currently owe a combined $1 trillion in credit card debt and over $12 trillion in mortgage debt. U.S. mortgage debt increased by $190 billion in the first quarter of 2024 alone.
How Bankruptcy Helps
Bankruptcy protection is part of the social insurance system that provides ways for individuals to get relief from unmanageable debt. The most common types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 bankruptcy discharges (eliminates) most unsecured consumer debts and is over in a few months, so you can begin rebuilding credit quickly. While you might have to sell property to help pay off creditors, there are Ohio bankruptcy exemptions that list types of property that cannot be sold.
Filing bankruptcy allows you to regain control of your finances. However, bankruptcy can look very different depending on whether you file Chapter 7 or Chapter 13.
Exemptions can include your home, clothing, cars, pensions, alimony, child support, equipment used for work (like tools), and household furnishings. If you do not own a great deal of property, your possessions may all be exempt, qualifying you for a “no asset” case, and you may be able to keep your home, car, and other items from being liquidated.
Be aware that exemption laws do not protect all property, all types of debt, or all types of creditors. Some debts, including most taxes and student loans, child support, and alimony payments, are not usually discharged in Chapter 7.
Not everyone is eligible for Chapter 7 bankruptcy protection. Your income and debt will be subjected to something called a “means test” to determine whether you qualify. If you are not eligible, filing for Chapter 13 may still be an option.
Chapter 13 bankruptcy is a repayment plan, under which you can consolidate payments to repay some or all of your debt affordably over a three- to five-year period and avoid fees and fines. If you successfully complete the court-approved payment plan, the debts covered by the plan are discharged.
Contact Us for Help and Advice
The bankruptcy process is complicated, and there are many papers to file and deadlines to meet. Contact the experienced and compassionate Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer for help, information, and support. We offer a free consultation where we will evaluate your financial situation, discuss your options, and help you decide on the path to a brighter future that makes sense in your individual case.
Delaying can only make your situation worse, so contact us online or call us today for your free consultation so we can determine what debt relief solutions will work best for you.
Call Fesenmyer Cousino Weinzimmer today at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) to speak with one of our skilled Ohio bankruptcy lawyers.
