Many people in Kentucky and across the country have debt. It almost seems an expected part of life anymore. Does this mean that the average American qualifies for bankruptcy?
Who Can Qualify for Bankruptcy?
Anyone can qualify to file for bankruptcy, whether you are an individual, married couple, or a business. Whether one qualifies for bankruptcy is not just about debt. It has to do with several factors, such as your income level, if you had any recent bankruptcies, and if your debts are an intentional act of fraud.
Certain types of bankruptcy chapters also have limits on who can file. For example, Chapter 7 is limited to those who earn less than the median income for their household size in their state. For those who have a higher income, they will not qualify for Chapter 7 and will need to file for Chapter 13.
Common Types of Debt for an Average Household
A recent report broke down what kind of debt most households have and how much.
According to the report, the debts for an average family include:
- Nearly $16,000 in credit card debt
- A mortgage of roughly $174,000 owed
- A $27,000 auto loan
- Close to $50,000 in student loans
Add on interest, and that is a whole lot of money owed to quite a few lenders. While some may be able to make do and pay their debts on this, others may find themselves in a perpetual state of owing creditors. If this situation describes your financial state, bankruptcy may be a way to help you get out of debt.
How Do I Know If I Should File for Bankruptcy?
If you are struggling with overwhelming debts, talk to an attorney to consider whether bankruptcy is the right solution for you.
Bankruptcy may be an appropriate option if:
- Your income is insufficient and debt is too far out of control
- You are being sued by creditors
- Your home is in danger of foreclosure
- You are at the point where you want to withdraw your retirement accounts to pay your bills
- You have a large amount of credit card debt, medical bills, and other unsecured debts.
Learn more about your bankruptcy options, requirements, and how it may be able to help alleviate your financial burdens.
Schedule your consultation today to get started.
Source: fool.com, “Here’s a Breakdown of the Average American’s Household Debt,” Maurie Backman, Dec. 24, 2017