One of the biggest misconceptions people have when they’re considering filing for bankruptcy is that they’re all alone. Most of us are reluctant to discuss financial problems, even with friends and family members who are very close to us. A new book by three professors analyzes information regarding bankruptcy filings over more than a decade and shows that this method of debt relief is more common than many Americans realize.
In “Debt’s Grip: Risk and Consumer Bankruptcy,” Professors Robert M. Lawless, Pamela Foohey, and Deborah Thorne show that in years where additional COVID-19 relief was not available, there were usually more than 700,000 personal bankruptcy filings. During times of severe economic stress, this figure has risen well above 1 million. The book is based on data collected through the Consumer Bankruptcy Project during an 11-year period.
One of the most notable revelations from this research is the rapid increase in bankruptcy filings among Americans over the age of 65. A demographic that was relatively stable 30 years ago is now the fastest-growing group of bankruptcy filers. According to the book, this shift is largely due to the diminishing security of retirement incomes. With fewer traditional pensions and more reliance on defined contribution plans like 401(k)s, many seniors are finding themselves financially vulnerable. Additionally, more older Americans are burdened with student loan debt, often as a result of co-signing for younger family members’ education.
The book also explores the root causes of bankruptcy in the United States. Not surprisingly, medical expenses often are the largest financial burden among individuals who file under Chapter 7 or 13. Other types of debts frequently cited include credit-card balances, student loan obligations, mortgages and overdue car payments.
Going beyond the raw data, the authors also look at personal stories of individuals who sought bankruptcy relief. These portraits dispel the myth that people with serious debt problems only have themselves to blame. Most filers are shown to be responsible members of their community who faced a financial crisis due to external circumstance, such as a medical issue, job loss or divorce.
At Jeff Field & Associates, we are dedicated to helping Georgia residents use bankruptcy as a means of stopping creditor harassment and making a new start free of overwhelming debt. For a consultation with an accomplished attorney, please call 404-381-1278 or contact us online. We have locations in Douglasville, Gainesville, Bogart, Lawrenceville, Marietta and Decatur.