Going through a Chapter 7 bankruptcy can be one of the most stressful moments in a person's life. One way that this process becomes even more burdensome is the way real estate is treated in the disposition process. While a homeowner can claim a homestead exemption, meaning the property can't be dissolved to resolve the debt, that does not prevent a home from being foreclosed upon if the borrower doesn't have the income to cover the mortgage payments.
Bankruptcy cases in Virginia and across the country are on the decline, but the reasons why may be more complex than they first appear. According to a report by Supreme Court Chief Justice John Roberts, bankruptcy filings have reached their lowest point in 10 years. While nearly 1.6 million filings were made in 2010, amid the widespread financial crisis, that number was halved by 2018. During the year, approximately 770,000 cases were filed in bankruptcy court, reflecting both corporate and consumer plans. The vast majority were filed by consumers, comprising 97 percent of the total.
An increasing number of older Americans are filing for bankruptcy in Virginia and across the country, even as bankruptcies overall appear to be on the decline. While 1.6 million people filed for personal bankruptcy in 2010, that number had reached only 789,000 by 2017, illustrating the changing state of the national economy. Still, the overall numbers may not clearly show some of the demographic differences that exist in bankruptcy trends. By 2016, 12 percent of all bankruptcy filings were made by people over 65, a proportion that rested at only 2 percent in 1991. The bankruptcy rate declined for people under 55, but shot up for those above that age.