Why do so many people file for bankruptcy?

Why do so many people file for bankruptcy?

Bankruptcy can be a byproduct of extenuating circumstances—most often exorbitant medical bills, which reportedly account for two-thirds of bankruptcies. For Robert Gale, going through a divorce was the catalyst.

What was the number of bankruptcy filings during the financial crisis?

At the height of the financial crisis, there were nearly 1.6 million bankruptcy filings, the majority of which were consumer cases. Nearly 10 years later, the annual total has dropped to less than 800,000. But that change isn’t a reflection of economic health alone.

Is it good for young people to file for bankruptcy?

For young people who find themselves mired in credit card debt, Reynolds sees bankruptcy as a chance for a fresh start, assuming you don’t own a home or other assets. Going to bankruptcy court and taking the requisite personal finance courses before and after bankruptcy can also put things in perspective.

Why is there a drop in Chapter 7 bankruptcies?

Two big forces may explain the drop in Chapter 7 consumer bankruptcies, Kluender says. One may be attorney fees. A Chapter 7 filing costs roughly $2,000, a price tag that potentially shuts out consumers and small businesses when they need debt relief the most (pdf).

What happens if there is no money in my mom’s account?

So the money in your mom’s account must first go to her creditors. If there is anything left, you get it. If, however, there isn’t enough money to pay off your mother’s creditors, you are not responsible for any unpaid balances—unless one of the above exceptions applies.

Can a son be responsible for his mother’s debt?

As such, being a son or daughter is not enough to make you liable for your mother’s unpaid obligations. While this applies to other relatives as well, there are a couple exceptions: Cosigning for the Debt. When you “cosign” on a credit contract with someone else, you each agree to be responsible for the debt.

Do you have to pay off your mother’s creditors?

If, however, there isn’t enough money to pay off your mother’s creditors, you are not responsible for any unpaid balances—unless one of the above exceptions applies. Here is why. Most people die leaving not only valuable property, such as a home or car, but unpaid bills as well.