The cost and standard of living in Connecticut is higher than many other states. This can make it easier for people to slip into debt and even harder for them to climb out. The longer that debt remains unpaid, the more it feels as though the debtor may never recover or find a way out. So, what can people do when the debt becomes so much that they cannot afford to make even their minimum payments to keep up?
According to CNBC, for many, the only answer is bankruptcy. For the fiscal year of 2018, more businesses and people were projected to file for bankruptcy than the prior year. At the end of 2017, Americans owed an astounding $13 trillion in debt:
- Over $1 trillion in credit card debt
- $1.2 trillion in auto loans
- $1.4 trillion in student loans
- $8.8 trillion in home loans
Unfortunately, in most instances, a court will not discharge student loans. Most other types of debts can be eliminated or the payment amount may be reduced. Retirement savings are typically immune from bankruptcy filings. Bankruptcy filings should also put an end to the creditor calls and harassment, though a few may slip through the cracks.
In spite of the benefits of filing bankruptcy, many people remain hesitant. They struggle with feelings of failure and worry about how having a bankruptcy on their record may affect their financial future. Forbes estimates that 65% of people who file for bankruptcy raise their credit score to 640 or higher after just two years. In short, bankruptcy is not a failure; it is just a minor setback on the road to financial security.