Rebecca Lessley felt embarrassed when she filed for bankruptcy this month.Then she saw how many of her friends had already done it.Lessley's troubles began three years ago, when she lost her job the same month she bought her Oklahoma City house.
By the time she got a new job in social work, she had a pile of debt that was growing beyond what she could control.She recently made a Facebook post asking her friends for bankruptcy lawyer recommendations.Within an hour, four or five people messaged her with recommendations."And I had people also asking me, 'Hey, when you go through and you talk to them, will you please let me know how it goes? Because I'm considering the same thing,'" Lessley recalled.Bankruptcy is a legal last resort for debt relief — and more Americans are using it than they were just a few years ago.
While the word "bankruptcy" often conjures up images of failed companies, personal bankruptcies are significantly more common.More than half a million personal bankruptcies were filed last year, a nearly 50% jump from three years earlier, according to the Administrative Office of the U.S.
Courts.Filings at the end of March were up almost 12% from a year earlier.Experts say this shows that a growing number of Americans have reached the point where the pressure of their debt has overcome the stigma of bankruptcy."It's telling us that consumers are having a harder time coping with their financial obligations," said Sasha Indarte, a professor of finance at the University of Pennsylvania's Wharton School.The first step in filing for bankruptcy is proving to a court that you can't pay your debts.Then, you get a court-appointed trustee to figure out the next steps.
That could include a repayment plan, possibly selling off some assets and maybe getting some debt erased.Bankruptcy can also make handling your debt significantly less stressful by formalizing how it gets handled through the court, rather than having to fend off debt collection agencies."Possibly...