In 2017, fewer than 500,000 Americans filed for bankruptcy. This is concerning to some financial analysts who believe many people, both here in Kentucky and elsewhere in the nation, would benefit greatly from a Chapter 7 bankruptcy filing. Unfortunately, misinformation and fear can cause some to shy away from a valid and valuable financial solution to overwhelming debt. Thankfully, this can be addressed through education.
The most common reason for a bankruptcy filing is medical debt, followed closely by divorce and those fleeing an abusive partner. However, many people still do not even realize Chapter 7 is an option. This is partly as a result of a 2005 change to the U.S. Bankruptcy Code pushed through by Congress, which made it more difficult for individual consumers to file for Chapter 7. The criteria introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act required individuals to pass a means test, as well as rank below the median income for their state.
With all of this said, consumer debt was slated to reach an all-time high by the end of 2018, and the holiday season often strains the finances of American families. This means that bankruptcy might be even more important as a tool moving into 2019. This is true on a high level as well, since improved financial stability in consumers leads to economic growth.
Chapter 7 bankruptcy can still be a daunting proposition for some Kentucky residents. Those residents might benefit from the guidance and advice of an experienced bankruptcy attorney. These legal professionals can help make sense of the process and eliminate fear by making the unknown known.