Experts estimate that more than 1 million women filed for bankruptcy protection in 2010. These women represented working, college-educated homeowners throughout the United States struggling to make ends meet. Many of these women were also single parents, whether due to divorce or other reasons.
Being female does not predispose anyone to one day filing for bankruptcy. Rather, women are more likely to find themselves in situations that lead to bankruptcy. Nine out of 10 female filers needed bankruptcy relief because of lost job, medical emergency or divorce.
Why are so Many Women Seeking Bankruptcy Relief?
The state of the economy plays a major role in all bankruptcy filings; as more and more people lose jobs, the resulting loss of income leads to relying on savings and/or unemployment compensation to make ends meet. When either run out, or if there are no savings or unemployment is not enough to cover existing bills, bankruptcy becomes an important option for debt relief.
Single-income households may be more vulnerable simply because there isn't another source of income to cover costs of living. While men often file bankruptcy because of similar triggers, women generally tend to stand on shakier economic footing to begin with, particularly women with children.
Women who are single parents may rely on domestic support obligations-child support and spousal support/alimony-to make ends meet, but often these obligations go unpaid or the amount paid does not cover the needs. Women with children tend to spend more of their income on basic needs for themselves and their children. This gives them less room in their budge when something unexpected occurs.
What Can Women do Differently?
First, it is necessary to say that the legislature created bankruptcy for a purpose: to help those struggling with unmanageable debt get on better financial footing. There is no shame in filing for bankruptcy assistance; in fact, depending on your situation, it may be the best financial decision you can make for yourself and your family.
But, looking at missteps women have generally made in the past that have made them more vulnerable to needing bankruptcy relief, the following are a few tips for avoiding financial problems in the future:
- Understand your finances. Many women rely on a spouse to handle the finances. It's important to know what exactly is being earned and spent each month.
- Get rid of debt. This sounds easier than it is, but consider creating a plan to reduce or eliminate existing debt. A Chapter 7 or Chapter 13 bankruptcy may be your best option for doing so.
- Know what you own. If you own assets (a house, a car, a bank account) jointly, make sure you know what they are and how you can access each.
- Make a career plan. Decide whether you're where you want to be, progressing in the direction you want to head.
- Develop a budget. Spending less than you take in is the only sure way to minimize accumulating new debt. Figure out what you must have and can't live without. If that totals more than your income, reevaluate.
- You have rights. Talk to attorney about your options for debt relief as well as about your obligations, particularly if you are getting divorced.
If you are a woman considering bankruptcy, you are not alone. Whether due to job loss, medical expenses, change in family situation or another reason, there are options for dealing with overwhelming debt. Your first step should involve speaking with an experienced Florida bankruptcy attorney to assess your individual situation and help determine if bankruptcy is the best course of action.
