Many many years ago, people stigmatized those who did not pay their debts and turned to bankruptcy to solve their financial problems. This stigmatization caused people to be afraid to seek help through bankruptcy because they did not want to be labeled “deadbeats.” They also believed that filing for bankruptcy would affect their ability to seek employment because they would have been regarded as financially irresponsible. The idea that someone would file bankruptcy was just not heard of. It was to many people demeaning.
Much of this stigma came from times long ago and how “deadbeats” were persecuted. In the 17th and 18th centuries, people who did not pay their debts would be put into stocks and put on public display. This persecution gave legitimacy to such stigma and stayed for a very long time. However, over the last couple of hundred years or so, things have changed and that stigma which scared many people away from bankruptcy court has long since diminished. Today, bankruptcy is looked at as a tool. A tool that helps those less fortunate and who have fallen on hard times. It provides a ray of hope and a chance for that fresh financial start that they desperately need.
The majority of those who file today, do so because of five major reasons; loss of income; illness; accident; a failed business venture and overextended credit. It is interesting to note that from 1900 through 1970, personal bankruptcy filings averaged .15 per 1,000 people. Today, bankruptcy filings are averaging 4 per 1,000 people. If you look at real numbers, the population in 1900 was 76,094,000 which calculates to 11,414 people filing bankruptcy in 1900. Compared to 2012 where there were 1,261,140 people who filed. So it shows that bankruptcy filings over the years has increased and people are utilizing the system to get back to financial stability.
As we all know, in today’s world, financial stability is a must especially for the baby boomers who are now retiring at lightning speeds. If you are one of those facing financial difficulties and are looking for some relief, do not discount bankruptcy as a means to end.