In September 2018, there were more than 770,000 bankruptcy filings in the United States. Of those cases filed in Tennessee and elsewhere, 97 percent were consumer bankruptcy filings. The number of cases filed was down from the roughly 1.6 million filed in September 2010. However, the downtrend in bankruptcy filings may be related to the cost of filing. It may also be related to the fact that many people don’t have assets to protect.

Legal fees for a Chapter 7 case average about $1,200, and that number jumps to $3,200 for Chapter 13 cases. However, those who file for Chapter 13 bankruptcy may be allowed to pay legal fees in installments. Older Americans tend to be more likely to file for bankruptcy because of limited financial resources. Professionals who follow the issue of bankruptcy do cite other more mundane reasons why bankruptcy filings have dropped in the past decade.

Some cite the Affordable Care Act as a tool that some may have used to avoid bankruptcy because of medical bills. Individuals may also be more likely to come to agreements with mortgage companies if they are having trouble paying housing costs. It should be noted that bankruptcy filings and economic health are generally not correlated. Instead, an individual’s own financial health usually determines his or her risk of filing for bankruptcy.

Individuals who need a fresh financial start may find it by filing for bankruptcy. In a Chapter 13 case, one may be entitled to keep property while a case is ongoing. It may be possible to renegotiate the terms of a secured loan during this time. Other benefits may include an automatic stay of creditor collection activity and the ability to have certain unsecured debts discharged when the repayment period is over.