Bankruptcies often land in the headlines when a big-name celebrity files for Chapter 11. We often hear of companies such as restaurants or big box retail stores in our own neighborhoods declaring bankruptcy. Even the President of the United States has owned or operated businesses that have utilized bankruptcy law to reorganize debt. So just how common are bankruptcies? The answer is that bankruptcies are far more common than you think.
Bankruptcies more Common Than You Think
The statistics show that about one in every seventy American households will file for bankruptcy, thus it's inevitable that you'll meet or know of an individual filing for bankruptcy protection. This isn't surprising when you consider that almost half of all US families spend more than they earn every year. Since the recession 9 years ago, the number of individuals and legal entities filing for bankruptcy has decreased, however, the US Bankruptcy Courts across the country handle thousands of bankruptcy filings for Chapter 7, Chapter 11, and Chapter 13 bankruptcy each and every day.
Primary Causes of Bankruptcy
Losing your job, contracting a serious illness, or being injured in an accident are occurrences that the majority of individuals don't ever expect to happen to them, and thus are some of the major reasons for bankruptcy. Also, among the primary causes of bankruptcy are unexpected expenses such as a lawsuit judgments or the overextending of credit. Divorce also ranks high amid the main causes of bankruptcy in California.
Bankruptcy is a Means to a New Beginning, Not the End
Bankruptcies have been shown to increase when the economy is in a recession or when unemployment rates are high. For the current moment, unemployment rates in the country have decreased tremendously and the economy seems to be quite healthy, but this could quickly change. If you are having trouble keeping up with monthly payment obligations or are in danger of losing your home or automobile, bankruptcy can be the lifeline to help you become financially solvent again. Contact a Sacramento bankruptcy attorney to discuss your debt relief options and find out if bankruptcy is the best option for you.