If you are looking into filing bankruptcy to resolve debt struggles, you are undoubtedly conducting research and learning all you can about the process. You may have already discovered that bankruptcy is an option when debt has spiraled out of control, and you cannot keep up with monthly bills. In doing your homework, you might have also figured out that bankruptcy offers a fresh start after you go through the process and wipe out qualifying debts. However, there is another source of information that may be useful as you are weighing bankruptcy options. The Top 10 bankruptcy statistics in Athens, GA, are important to know because they offer insight into the experiences of others who have filed.

Though you may be able to eliminate debt through either Chapter 7 or Chapter 13, there are differences between the two types of bankruptcy. The data helps you decide how to achieve your goals in addressing debt.

When it comes time to file for bankruptcy, it is critical to retain legal representation for assistance. Numbers are helpful for seeing the big picture, but you need custom-tailored help from a knowledgeable Athens, GA, bankruptcy attorney. Some of the statistics should convince you of how important it is to have counsel on your side.

 

1. Overall Debt of Americans Hits Historic Levels

Initially, when considering bankruptcy, you should remember that you are in good company if you are dealing with debt. According to the Federal Reserve Bank, Americans bear almost $17.3 trillion in household debt, which is distributed among various specific types:

• $12.14 trillion of the total household debt is through mortgages.
• Consumers carry around approximately $1.08 trillion in credit card debt.
• Americans have accumulated around $1.6 trillion in auto loans.
• Those who borrowed for college carry $1.6 trillion in debt for student loans.

There are many economic and financial factors that could be behind these trends, but the figures are generally on the rise in recent years. Another significant source of debt for many Americans is medical debt, with the costs of health care increasing every year.

 

2. Data on Bankruptcy Filings in General

The numbers on total bankruptcy filings and petitions filed by individuals have fluctuated over time. Individual filings for Chapter 7 and Chapter 13 increased from 2022 to the same time periods in 2023, from 31,188 to 35,128. One reason for the increase could be that the payments for COVID-19 federal financial aid drew to a close, meaning more people were having difficulties making ends meet.

Regardless of the pandemic, the data shows that more people are taking advantage of the benefits of filing for bankruptcy. You can discharge debt through both Chapter 7 and Chapter 13, though the proceedings and rules are different. Once your case ends, you eliminate qualifying debt and have a clean slate for purposes of your financial status.

 

3. Numbers on Chapter 7 Versus Chapter 13 Bankruptcy

In total, there are approximately 374,250 people who file individual bankruptcy every year. Of these, more than 225,450 file their petition under Chapter 7, while around 157,000 go through Chapter 13 bankruptcy proceedings. In other words, almost 60 percent of all individuals who file bankruptcy do so under Chapter 7.

This figure may come as a surprise to those who believe it is challenging to qualify for Chapter 7. It is true that the eligibility rules are strict, as they look at your earnings compared to the state median income level. You may also qualify through the Means Test, which takes into account the bills you pay monthly. As such, eligibility for Chapter 7 is not as tough as expected.

 

4. Bankruptcy in Athens

The Federal Reserve reports that there are five states that rank at the top for bankruptcy filings, and Georgia is one of them. The state is #3 for filings, with California and Florida taking the #1 and #2 spots. The total number of cases filed in Georgia bankruptcy courts every year is approximately 20,700, including both individual and business filings.

Individual Chapter 7 cases number 9,760, and almost 11,000 people file Chapter 13, representing a reversal of the national statistics with respect to these two types of bankruptcy. This could be due to the fact that Chapter 13 eligibility rules are more relaxed, so those who do not qualify for Chapter 7 may still get bankruptcy relief. However, some individuals may choose Chapter 13 even if they are eligible for both. With Chapter 7, your assets could be subject to liquidation by the bankruptcy trustee. In Chapter 13, they cannot be sold to satisfy your debt to creditors.

 

5. Chapter 7 Bankruptcy Rates and Bankruptcy Statistics in Athens

Though the figures may fluctuate over time and vary among US states, Chapter 7 is the most common type of bankruptcy individuals file. Still, the total number of Chapter 7 bankruptcy petitions has generally decreased in recent years. For instance, there were 843,545 Chapter 7 cases filed nationwide in 2012. By 2021, that number had dropped to 288,327. There are various factors at stake that could explain the difference, including:

• Inflation and economic factors;
• Changes in the rules that affect eligibility; and,
• The COVID pandemic, but only for the last two years of the relevant time period.

Another important figure regarding Chapter 7 should interest those who would like to wrap up their case quickly. With this type of bankruptcy and help from a bankruptcy lawyer to avoid mistakes, it may be finalized within 4 to 6 months.

 

6. Success Rates with Chapter 7 Bankruptcy

Bankruptcy is not a win-lose proceeding like other court cases, so most of those who file Chapter 7 will successfully get qualifying debt discharged. In fact, 99 percent of those who go through Chapter 7 will have their debts eliminated, assuming they are eligible. A bankruptcy court may deny the petition if:

• You file too soon after a previous bankruptcy case.
• You engaged in fraud in filing your petition and schedules.
• You did not file in the proper court.
• You filed to submit proper fees.
• You did not attend the credit counseling sessions as required by bankruptcy laws.

Of course, eligibility under the state median income level or Means Test is still essential. If you are denied under Chapter 7 because you do not meet the criteria, you are able to convert your case into Chapter 13.

 

7. Figures on Chapter 13 Bankruptcy

Chapter 13 falls in second place regarding the total number of bankruptcy petitions filed. This type of bankruptcy is a suitable remedy for those who do not qualify for Chapter 7 or who do not want their assets at risk of liquidation. Bankruptcy cases under Chapter 13 have also undergone fluctuations, with a drop from almost 366,550 in 2012 to 120,000 in 2021. However, the number of Chapter 13 bankruptcy filings spiked after this time period. Comparing the same quarters in 2021 and 2022, the total petitions filed experienced a 55 percent increase.

 

8. Important Numbers to Know About Chapter 13

To help you better understand Chapter 13, there are some additional bankruptcy statistics in Athens and figures that provide some background:

• The debt limit to file this type of bankruptcy is quite high. You may qualify to resolve up to $2,750,000 in debt through your debt repayment plan and the Chapter 13 process.
• Your debt repayment plan is how you satisfy a percentage of what you owe creditors, and it is an arrangement you complete within 3 to 5 years.
• It costs $313 to file a petition for Chapter 13 bankruptcy.

 

9. Bankruptcy and Your Credit Report in Athens

One of the main numbers that people focus on with bankruptcy cases is how long the matter will remain on your credit report and the hit that your credit score will take. Some information is helpful:

• A bankruptcy case remains on your credit report for ten years after Chapter 7 and 7 years after Chapter 13.
• The average bankruptcy filer will see a drop of around 150 points or more to their credit score, though the number could be up to 240 or more.

Still, you should always consider the benefits of bankruptcy and put these numbers into perspective. If you are unable to pay off all debt within 7 to 10 years, which many people cannot, bankruptcy is actually a faster way to resolve your financial strife. Plus, you have to look carefully at your credit rating now. When you are having trouble paying bills and falling behind, there is a good chance your score is already in jeopardy.

 

10. Bankruptcy Trends When You Have a Bankruptcy Attorney

Two of the most impactful bankruptcy statistics in Athens relate to the success of your case when you have legal representation. In a Chapter 7 case, 1 in 3 people who represent themselves have their bankruptcy petition denied. Worse, if someone files Chapter 13 and attempts to go it alone, they will be successful just 2.3 percent of the time.

 

Set Up a Consultation with an Athens, GA, Bankruptcy Lawyer Today

The Top 10 bankruptcy statistics in Athens offer insight into trends, but you will need personalized advice from an experienced Georgia bankruptcy attorney if you are considering your options for dealing with debt. For more information on how the process works, please get in touch with Morgan & Morgan, Attorneys at Law, P.C. We can schedule a consultation to review your circumstances and explain what to expect when filing for Chapter 7 or Chapter 13 bankruptcy.

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