Kimberly Draxler, a single mom on disability, couldn’t believe it when her mortgage lender confirmed she was on the verge of losing her home in Hillview, Kentucky — with a distress sale just days away. "I did not want to lose my house," Draxler, 57, told CBS News. "I wouldn't have (a) place to go." She had only just learned of the foreclosure when an attorney sent her a letter offering his help in preventing the bank from taking away her home of 30 years. Must Read "They never called me and told me t ...

Core Insights - The trend of increasing bankruptcy filings is expected to continue due to high interest rates and inflation pressures on households [2][10] Bankruptcy Overview - Chapter 7 bankruptcy allows individuals to discharge unsecured debts like credit card and medical debt, typically taking four to six months from filing to discharge [1] - Chapter 7 bankruptcy does not erase student loans, tax debt, alimony, or child support [1] Current Bankruptcy Trends - Individual Chapter 7 bankruptcy filings surged by 19% year-over-year in September 2025, with a total of 249,152 filings in the first nine months of 2025, a 15% increase from 216,773 filings in the same period last year [2][3] - Chapter 13 bankruptcy filings also increased by 4.3%, indicating more consumers are seeking bankruptcy as a financial reset [2] Economic Factors Influencing Bankruptcy - Inflation has outpaced wage growth for 43% of Americans, contributing to financial strain [2] - The rise in bankruptcy filings is linked to the inability of households to manage debt amidst stagnant wage growth, particularly in low- and middle-wage jobs [2] Bankruptcy Process and Requirements - Individuals must undergo pre-bankruptcy credit counseling before filing [5] - A "bankruptcy means test" is applied to determine eligibility for Chapter 7 bankruptcy, requiring income to be below the median for the state [7] Alternatives to Bankruptcy - Options include negotiating directly with creditors, seeking help from nonprofit credit counseling agencies, or considering debt consolidation loans [12][13][14]