Experts Say Fear Holds People Back From Bankruptcy

No matter how hard some people work to get ahead of their debt, they always seem to end up back where they started — or even worse. Despite this, many people either do not consider bankruptcy or immediately rule it out, perhaps partly because bankruptcy is still a misunderstood and even stigmatized process. This means that might be a lot of Virginia residents who do not realize they could benefit from consumer bankruptcy.

Around 17 million American households owe more debt than they own. This accounts for approximately 14% of all households, but only 1% end up actually filing for bankruptcy every year. There were 752,160 filings for personal bankruptcies in 2019, and the difference between those 17 million over their heads in debt and 2019’s filings are what researchers refer to as the missing bankruptcies. Missing bankruptcies are filings that could have happened, but didn’t.

So what is behind these missing bankruptcies? Experts say that many lack the information they need to really get started with the process, while others have a sense of misplaced optimism about their ability to tackle mounting debt. Others still are scared about what filing for bankruptcy actually means.

One of the biggest fears that holds people back is that they are scared they will lose everything. This is simply not the case, as many people keep their homes, vehicles and other important property. It is also possible to rebuild credit scores and access new lines of credit in the future. Learning more about the benefits of bankruptcy may help those who are still worried about moving forward with the process. One way of doing so is by speaking with an attorney who is knowledgeable in Texas state law.