A common misconception about bankruptcy is that it is only needed by low-income Americans. In contrast, the reality of bankruptcy demographics show an increase in filings by those with associates and bachelor's degrees. Of the more than 1.5 million Americans who file personal bankruptcy each year, many are middle and even high income earners. In 2010, there were over 49,000 bankruptcy filings in Tennessee.
A striking example of the dramatic impact of our lagging economy is the bankruptcy of former socialite, Patricia Kluge. In 1990, Kluge made headlines for receiving a rumoured $1 billion divorce settlement from John Kluge, owner of a media empire who was once considered the richest man in America.
In 2011, Kluge, who is a British citizen, filed bankruptcy after the failure of a winery and trouble with U.S. tax authorities. The winery was the latest in a series of failed ventures. She cited $46 million in debts in her petition, according to media reports. After her house (valued at over $23 million) was seized by the federal government, Kluge's remaining assets are estimated by some reports to be less than $10 million-perhaps as little as $1 million.
While Kluge's fall may seem shocking because of its scale, it has not been that unusual for business owners to go bust in recent years. The recession has taken a toll on many business owners from construction companies to families investing on real estate projects that soured when mortgage bubble burst.
The United States has flourished because of the innovation of individuals who dared to take risks on business projects that would benefit our society. New businesses benefit their communities by providing jobs and a sustaining tax base. Unfortunately, they don't always succeed. When that happens, bankruptcy exists as a safety net to help these innovators get a fresh start.
Failed businesses are not the only reason why the wealthy or elite may need to file. Bankruptcy is an option for anyone whose liabilities or debts are greater than their assets or ability to pay. That is just as true for middle and upper income Americans as for those with little money at all. Nashville debt solutions lawyers work to help many families find remedies for their debt problems.
Nationally, at least one in every 53 people will file bankruptcy at some point in their lives. Many middle-class Americans find themselves deeply in debt after job losses, divorces, or major medical expenses.
Although bankruptcy is a federal court issue, rules vary by state as to what assets a debtor can keep or exempt from creditors during bankruptcy. In many cases, filers can keep their primary home and a car as well as most personal items.
Anyone who has been struggling with the stress of owing more on debts than he or she can comfortably pay should seek the counsel of an experienced local bankruptcy attorney to discuss his or her specific situation and learn about his or her bankruptcy options.
