A study by the National Bureau of Economic Research preliminarily concluded that consumer bankruptcy protection leads to increases of yearly earnings by an excess of $5,500 per year. This means that their annual earnings increased by 25.1 percent from what they earned prior to the bankruptcy filing. The bankruptcy protection involved mainly concerned individuals filing Chapter 13 bankruptcy.

According to findings, these filings provide significant debt relief and apparently also lead to close to a 20 percent decrease in mortgage foreclosures. There were 1.5 million U.S. residents filing for consumer bankruptcy in 2010. The total debt relief from these filings is in the hundreds of billions of dollars.

Chapter 13 bankruptcy allows for filers to keep assets in exchange for restructuring of the debt. Unfortunately, the manners in which bankruptcy cases are decided are not always uniform. For example, a judge in Wisconsin federal court may rule differently than judges in other jurisdictions. This is in part because bankruptcy laws are open to various interpretations.

It’s important in these situations to have skilled bankruptcy experience in making certain your personal circumstances receive the attention it deserves. Filing for bankruptcy without legal representation likely decreases the chances of success of having the bankruptcy petition accepted.

The above-mentioned study concluded: “In our empirical analysis, we find compelling evidence that Chapter 13 bankruptcy protection benefits debtors.” Overall, these filings apparently placed filers in better and less stressful circumstances. Surprisingly, the study found there were even increases in employment for individuals filing consumer bankruptcy. Overall, it appears bankruptcy filings led to a positive outcome.

Source: Five Thirty Eight, “Infant Mortality, Post-College Jobs And Chapter 13 Bankruptcy,” Andrew Flowers, Sep. 30, 2014