Bankruptcy is Back in Fashion, and Nobody is Having a Good Time
The number of Americans throwing in the financial towel is climbing fast, and it turns out the 'fresh start' is a lot more expensive than the brochures suggest.
It’s getting ugly out there. After a brief lull when the government was handing out checks, people are back to drowning in debt and heading to court. We are talking about half a million people hitting the reset button last year, with numbers just keeping on climbing.
The system is basically a tug-of-war between Chapter 7 liquidation and Chapter 13 repayment plans. The kicker is that bankruptcy doesn't actually wipe your slate clean. You are still stuck with taxes, alimony, and, of course, the ever-dreaded student loans. And if you think a 'fresh start' means you are back in the green quickly, think again—it takes most people up to 25 years to actually recover financially.
It’s wild that in some states, like Arkansas, you might lose your house over a debt, while in Texas, you’re basically shielded. The law cares more about keeping creditors happy than your personal sanity.
Bankruptcy is the financial equivalent of a lobotomy: it cures the headache by removing the brain, and it takes decades to grow back.
Source: The Conversation
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