What Are the Top 7 Reasons That Someone in Columbus, Ohio Would File for Chapter 7 Bankruptcy?

Studies show that the total personal debt in the U.S. has reached nearly $18 trillion, with the average U.S. adult owing $66,772 to their respective creditors. Some people use do-it-yourself debt management strategies, such as the debt snowball or debt avalanche method, to get out of debt, and others use formal debt management plans recommended by credit counseling agencies. In extreme cases, some file for Chapter 7 bankruptcy. According to the U.S. Bankruptcy Court Southern District of Ohio, an estimated 7,647 people filed for Chapter 7 bankruptcy in 2024.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is, essentially, a form of bankruptcy that discharges unsecured debt. It stops creditors from contacting debtors, suing them, garnishing their wages, or employing other debt collection strategies.

Top 7 Reasons Why People in Columbus, OH File Chapter 7 Bankruptcy

The reasons why people in Columbus, OH file Chapter 7 bankruptcy are not too different from why people in other cities and states file such bankruptcies. Some of the more commonly cited ones include the following:

• Loss of income – Many people file for Chapter 7 bankruptcy after a job loss, especially if they are saddled with high COBRA premiums to maintain health insurance after becoming unemployed. Most will do the same if they suffer a pay cut or become disabled.
• Medical expenses – Approximately 41% of adults have debt caused by medical or dental bills. Many drain their savings, max out their credit cards, work more hours, or join the gig economy to pay these bills. When all else fails, however, some resort to filing for Chapter 7 bankruptcy.
• Foreclosure – Owning a home means achieving the American dream, but it can quickly become a financial nightmare when individuals fall behind on mortgage payments. To pause foreclosure proceedings when they can no longer make monthly mortgage payments, some people file Chapter 7 bankruptcy.
• Student loans – Many people go into debt to achieve a college education. The median student loan balance was between $20,000 and $24,999 in 2022. Repaying student loans can leave little to no money to pay for other expenses. To give themselves some financial breathing room, some people will file for Chapter 7 bankruptcy to escape crushing student loan debt.
• Oppressive debt – Some people find keeping up with car payments, credit card payments, student loans, and other expenses while simultaneously trying to keep a roof over their heads and food on the table extremely challenging. To get back on track financially, some file Chapter 7 bankruptcy.
• Divorce – The dissolution of marriage can give rise to child support, spousal support, and other divorce-related expenses, all of which can be costly. And many are not dischargeable. As a result, some people will file for Chapter 7 bankruptcy to make dealing with credit cards, car loans, and other expenses easier.
• Loans to friends or relatives – Some people go into debt when they loan money to friends or loved ones and never get it back. Some people will file Chapter 7 bankruptcy to escape such debt, especially if it is causing them to fall behind in credit card payments, car payments, and other expenses.

In summary, bankruptcy can help people drowning in debt, but it does come at a price. Firstly, it can ruin their credit score, and second, it remains on their credit report for 10 years. To determine whether or not this approach to getting out of debt is right for you, consider speaking with a bankruptcy lawyer today.