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In my book, The ABCs of Getting Out of Debt, we discuss several ways to deal with debt. While not a popular option, for many people bankruptcy is the only option. Before you jump into any debt reduction program, make sure to know all of your options available to you.

The word bankruptcy alone can conjure a range of emotions including shame, disapproval, and fear. If you’ve been through a bankruptcy, you may wish it never happened. If you haven’t ever had to file, you may judge those who have as simply irresponsible with their finances. The truth is, common life events such as divorce, a small business that goes under, a lawsuit, or an unexpected illness can throw anyone’s financial life into a tailspin and land them in bankruptcy court.

According to research on families and bankruptcy by then Harvard Law Professor Elizabeth Warren nobody is immune from the possibility of bankruptcy. Bankruptcy occurs in all walks of life and income levels. “The data shows that families filing for bankruptcy … were a cross section of middle-class America,” she explains. Warren has reported bankrupt debtors to be:

• At an educational level slightly higher than average in the U.S.

• About a 50/50 mix of homeowners and renters.

• Employed in fields that mirror the range of occupations in the U.S. job market.

In addition:

About 90% would be classified as “solidly middle class.”

• Two out of three debtors had lost a job at some point shortly before filing.

• Nearly half had medical problems.

• One-fifth of the debtors had recently been through a divorce.

In fact, Warren says that jobs, medical problems, and divorce account for about 80% of the filings.

Her scariest statistic, however, is this: The single greatest predictor that a woman will file bankruptcy is whether she has children.

As previously mentioned, there are many methods to reduce your debt and build credit. Bankruptcy is not the only option available, but is a viable one for many. For more information on this topic, please read ABCs of Getting Out of Debt.