Who is Joe Debtor?

by Joel Sandwith on March 22, 2011

A few weeks ago, the sponsors of this blog, Hoyes Michalos and Associates, published a study they had done of the people who had filed bankruptcy with the firm over the previous two years.  You can find this study here.

There are lots of interesting facts and figures contained in the report itself, for example that the average age of a person who files bankruptcy is 41, that they carry an average debt load of over $24,000 in credit cards alone, and that about 58% of filers are male.

What is more interesting is what leads Joe to debt.  What you realize as you read through this is that he can be almost anyone.  There has been and continues to be a stigma attached to bankruptcy, but this study shows that it is not fair to equate bankruptcy with failure.  Certainly, some people have enormous resources like family money, or extremely well paying jobs, but most of us lead modest lives and need to be careful with every dollar.

The causes of debt noted in the study range from job loss or lowered income, to marital or relationship breakdown, disability or injury, and what was generically branded financial mismanagement or over extension of credit.  This last category is a broad one, and can include simply misunderstanding how to manage a budget, being overwhelmed by available credit, leaving school with debt and not being able to get a job that pays as much as you had hoped.

The key point is, though, that misfortune can happen to almost anyone, and if it happens to you, how prepared financially are you?  Could you withstand a job loss?  For how long?  Have you provided yourself with a cushion large enough to get back on your feet, or would a life changing event also find you in massive debt?  The problem with the stigma of bankruptcy is that it is easy to look at someone who has needed financial help as being someone who has failed, but unless you know what led them to that point, you can’t make that judgement.

Most of the folks we meet with would love to be able to repay their debts, in fact for those that can pay back part of the debt, we can offer a consumer proposal as an alternative to bankruptcy.  Typically, what started as a small amount of debt snowballed to a mountain of debt when something occurred, that was beyond their control.

If you feel like your life may have taken a turn like Joe’s, feel free to give us a call, toll free at 310-PLAN, so that we can go over your options with you.

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