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    • Ronson J. Shamoun, ESQ., LL.M.
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  • Home
  • About
    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
    • Joseph Cole, ESQ., LL.M.
    • Devon J. Arabo, ESQ., LL.M.
    • Lauren Suarez, ESQ., LL.M.
    • Daniel Huynh, Esq., LL.M.
    • Christopher Engelmann, ESQ., LL.M.
    • Leslie Miranda, Esq., LL.M.
    • Brian M. Malloy, Esq.
    • Steve S. Mattia, Esq.
    • Sam Imandoust, ESQ., LL.M
    • Kaveh Imandoust, JD, MBT, CPA
    • Andrea Cisneros Valdez, Esq., LL.M.
    • Martin Schainbaum, ESQ., LL.M.
    • Dod Ghassemkhani, ESQ.
    • Vincent Renda, Esq.
    • Pedro Bernal, Esq.
    • Melanie M. Shamoun
    • Sandie Portilla
    • Renae Arabo
    • Sabri P. Shamoun
    • Hilary Dargavell
    • Lupita C. Torres
    • Jewell Cornejo
    • Kesia Belford
    • Remy Hogan
    • Judith Jeremie
    • Marley Smith-Peters
    • Melanie Chan
    • Tanner DeMera
    • Charles Ecker
    • Anna Gurr
    • Asia Smith
  • Practices
    • ERTC – Call Us Before It’s Too Late!
    • Tax
      • IRS TAX MATTERS
        • IRS Appeals
          • IRS Appeals Process
          • Contesting an IRS Levy
          • Why Retain RJS LAW for IRS Appeals
          • 4 Tips For Navigating The IRS Rapid Appeals Process
        • IRS AUDITS
          • IRS Correspondence Audits
          • What are IRS Field Audits?
          • Initial IRS Compliance Center Audits
          • IRS Office Audits
          • What happens in an IRS Audit?
          • Taxpayer Rights Under IRS Publication 1
          • IRS Warns Taxpayers About Scam
        • NOTICES
          • IRS Notices
          • IRS Letters
          • FTB Notices
          • Avisos en Español
        • IRS Collections
          • Avoiding and Eliminating IRS Tax Liens
          • Collection Due Process Hearing
          • CP 501 – IRS Notice
          • Failure to file a tax return: What happens?
          • How the IRS calculates interest
          • How to get a tax levy released
          • ACS – Automated Collection System
          • IRS Collections Process
          • IRS Interest Abatement
          • IRS Revenue Officers
          • Jeopardy Assessments and Jeopardy Levies
          • National Tax Agencies
          • RJS LAW Approach to Collections
          • IRS Statute of Limitations on Collections
          • Streamlined Installment Agreements
          • Tax Penalty Abatement
          • Taxpayer Assistance Orders
        • IRS Payroll Tax
          • Independent Contractor Reclassification Audits
          • IRS Forms 940 and 941
          • IRS Trust Fund Interviews
          • Payroll Tax Liability Payment Options
          • Trust Fund Recovery Penalties
        • IRS Wealth Squad
        • Offer in Compromise & Tax Settlements
          • OVERVIEW OF OFFER IN COMPROMISE PROCESS
          • The Offer in Compromise Process
          • Appealing an Offer in Compromise
          • How does the IRS evaluate an Offer in Compromise
          • Offer in Compromise and Dissipated Assets
          • Offer in Compromise Requirements
          • Pros and Cons of an Offer in Compromise
          • Why Choose RJS LAW?
          • Offer in Compromise Alternatives
          • Actual IRS Offer in Compromise Results
      • STATE TAX MATTERS
        • EDD California Payroll Tax Lawyer
          • EDD Investigations
          • EDD Collections – Liens, Levies, and Garnishments
        • CDTFA – California Sales Tax
          • California Sales Tax Appeals
          • California Sales Tax Audits
          • California Department Of Tax And Fee Administration – CDTFA
        • California State Tax Matters – California Franchise Tax Board | FTB | EDD
          • California Residency Audits
          • Discharging State Income Taxes in Bankruptcy
          • State Tax Practice – Outside of California
      • CRIMINAL TAX ISSUES
        • Criminal Investigation Division
        • IRS Criminal Investigation Division Tactics
        • Criminal Tax Defense – Tax Crimes
        • Currency Transaction Records & Suspicious Activity Reports
        • IRS Methods of Proof: Tax Fraud and Evasion
        • Methods IRS Agents Use to Locate Assets
        • IRS Special Agent Visits
        • Are You a Criminal Investigation Target?
        • Criminal Tax Attorney vs. White Collar Defense
      • CORPORATE TAXES
      • TAX COURT LITIGATION
      • Innocent Spouse Relief
    • International Tax
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    • Trust Litigation
    • Trust, Estate & Probate Litigation
    • Trust & Estate Administration
    • Probate
    • Bankruptcy
    • Civil Litigation
    • Criminal Defense
    • Accidents & Injury
    • Corporate & Transactional
    • Private Wealth Services
    • Real Estate Law
      • Landlord Tenant Law
    • Employment Law
  • Tax Institute
    • 8th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 28th, 2023
    • 7th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 15th 2022
    • 6th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 5th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 4th Annual USD School of Law – RJS LAW Tax Controversy Institute
  • Testimonials
  • Giving
    • Giving
    • RJS Law Donates Billboard to the Girl Scouts
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    • Ronson J. Shamoun at events with various dignitaries
    • SD50 Extraordinary Leadership
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How Common Is Bankruptcy?

How Common Is Bankruptcy?

Is Bankruptcy Common

How common is bankruptcy? Bankruptcy filings are more common than you might think. A recent study looked at thousands of filings over a 6-year period and found some interesting bankruptcy filing patterns. Here is what the research found.

How Many People Have Filed for Bankruptcy?

From 2013 until 2019 approximately 1 in 10 consumers in the U.S. filed for bankruptcy according to Robert Lawless, Professor of Law at the University of Illinois in Urbana-Champaign. People turning to the bankruptcy system usually file after years of mounting debt they have been unable to resolve, despite their best efforts. While there is no “typical” person that declares bankruptcy, there are some overall patterns.

Who Is Most Likely to File?

The analysis of more than 5,000 bankruptcy filings suggests nine groupings of financial and household situations that are most common among bankruptcy filers:

  1. Car owners
  2. Homeowners
  3. Black households
  4. Women
  5. Black women
  6. Single mothers
  7. The self-employed
  8. Property owners
  9. People with long-term debt

“Two of the bigger factors for bankruptcy were, as expected, homes and cars, because those are the two big-ticket items that consumers buy,” Lawless said. “The idea of filing for bankruptcy for those items is so you don’t lose them—so you’re not homeless or are unable to get to work. The current bankruptcy system gives people powerful, effective tools to do just that.”

It is important to note that a number of these categories are not necessarily exclusive of each other, they tend to overlap and intersect. For instance, women and African American households are overrepresented in the data as are black women and single mothers. These  filers may be filing to protect their homes and cars as well as long-term debt. Consumer debt is not limited to one specific set of financial problems, it is typically spread over several monetary issues which continue to build up and worsen over time.

Professor Lawless and his co-authors at the Consumer Bankruptcy Project say their examination of the data indicates a need to overhaul our current bankruptcy guidelines and laws. The study reveals the current system is too broad and does not adequately address the complex problems currently facing American consumers. One improvement might be a move to more of an “À la carte” bankruptcy system, Lawless said.

At its core, filing for bankruptcy will help reduce, reorganize, or discharge debt, providing a better financial future for families. However, it is important to point out that it is not a magic bullet that will automatically solve all your financial worries. While the debt might be gone, the problems that created it in the first place may remain. Unexpected medical bills, the high cost of reliable childcare, inflation, our current COVID 19 related financial woes will still be there even after courts reduce, reorganize, or discharge your debts. People will still need to address their individual financial situations and habits to better secure a sound financial future.

If you are dealing with mounting debt and considering filing for bankruptcy, it is important to maximize asset protection. Developing a proper strategy can be difficult to properly prepare, determine, and implement. RJS LAW and its qualified attorneys are available to assist in understanding and completing the process as well as with determining a succinct filing timetable. Please call RJS LAW for a free confidential consultation and assessment at (619) 595-1655. You may also contact us via the web at https://www.RJSLawFirm.com. We look forward to hearing from you.

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