Bankruptcy Bang for the Buck

Bankruptcy Bang for the Buck

Bankruptcy bang for the buck is another way of saying whether filing bankruptcy will benefit you financially. In other words, will the savings of a bankruptcy outweigh the cost of filing for bankruptcy?

With the average consumer bankruptcy, credit card debt alone exceeds $23,000. This amount does not include other forms of debt. Medical bills, car repossessions, payday loans and other unsecured debts often accompany the credit card debt figure. For the average bankruptcy filer, then, there is a good bankruptcy bang for the buck.

If, just considering the average credit card debt, the amount spent on interest in a few months is more than the cost of filing a bankruptcy, there is bankruptcy bang for the buck. It is easy to see why. Spending $1,500 filing for bankruptcy is less than the interest you pay on your credit cards over a few months. Spending money on your credit card interest gets you nowhere. Filing bankruptcy gets you a discharge and your debt is done.

The traditional mindset with bankruptcy is file only as a last resort. But given the bankruptcy bang for the buck, maybe that logic is flawed. An article in the Huffington Post suggests filing right away if it is cheaper to file bankruptcy than to manage your debt for a few months. The logic makes sense.

The past mindset of bankruptcy has often been tied to reluctance. People have hesitated from filing. Perhaps fear or some supposed stigma prevents them. But no more. It is a results-oreiented society we now live in. If there is a bankruptcy bang for the buck, people will file. Filing bankruptcy is a legal right. If your finances are such that is is worthwhile, filing bankruptcy makes sense.

There is more to it than just bankruptcy bang for the buck. Eliminating your debt through bankruptcy creates a peace of mind. It is easier to live without owing debt, particularly debt you cannot afford!