Debt and bankruptcy are scary topics for a lot of people. You may not want to think about these things, but if you suffer from crushing debt, it is necessary to face the issue headfirst. Plus, you do not need to feel ashamed about considering bankruptcy. It is a viable financial strategy for a lot of consumers. In fact, approximately 733,000 individuals and businesses declared bankruptcy in 2018.
Even if you are not ready to submit paperwork to the bankruptcy court right away, it is important to keep in mind as an option to wipe out your debt. Here are some facts and statistics about bankruptcy and debt to help you understand that you are not alone and that you do not need to be afraid.
Debt by the numbers
You may feel guilty or fearful about your debt, but you are not the only one struggling. The overall household debt in America was $13 trillion in 2017. Here is how that adds up:
- Mortgages: $8.8 trillion
- Student loans: $1.4 trillion
- Auto loans: $1.2 trillion
- Credit card debt: $1 trillion
The average household with credit card debt owes $16,883. While these numbers may not exactly be good news, they are helpful to know. Many other people face enormous financial hurdles just like you, and many deal with it by filing bankruptcy.
As you think about bankruptcy, you should know about your options. If you lack sufficient income to repay your debts and do not have many assets, you may be able to qualify for Chapter 7. Chapter 7 eliminates various debts, including from medical bills, credit card debt and personal loans. If you have more income and assets, you may file Chapter 13. Chapter 13 sets up a three-to-five-year payment plan instead of discharging the debt. Both options stop collection activities, such as wage garnishments, calls from debt collectors and lawsuits from creditors.