You Are Not Alone: Many Are Struggling With Debt

Why the isolation is an illusion, and why bankruptcy is far less frightening than it looks

One of the hardest parts of struggling with debt has nothing to do with the numbers: It is the loneliness.

So many of the people who come into our Northern Virginia offices describe the same quiet feeling. They believe they are the only one falling behind. Everyone around them appears to have it figured out. They assume that if they had worked a little harder or budgeted a little better, they would not be sitting in this spot. They carry that belief for months, sometimes years, and it keeps them from reaching out for help long after they should have.

Unfortunately, when dealing with debt, no one hears the truth enough: You are not alone.

The highlight reel is not real life

A big part of why people feel so isolated is that everyone else looks like they are thriving. Scroll through social media for ten minutes and you will see the vacations, the new cars, the kitchen renovations, the dinners out, and the “just closed on our house” posts. What you do not see is the credit card balance behind the trip, the auto loan that is underwater, the line of credit that paid for the renovation, or the quiet stress behind the smiling photo.

Cars are a common status symbol, and a new vehicle in the driveway every three years photographs well. It is worth asking what sits behind it.

Trading in that often usually means a higher payment each time. It also frequently means rolling the unpaid balance from the old loan into the new one, so the shortfall from the last car rides along into the next one. Do it twice and you are making payments on three vehicles while driving one. Leasing gets to the same place by a different road. A lease is closer to renting. You pay for three years, build no ownership in the car, and hand it back with nothing except the option to start over. The payment never ends because there is never a payoff. Either way, people end up owing more than the car is worth, payment after payment, with no end in sight. Auto loan balances nationwide are at an all-time high. The shiny upgrade and the financial strain often arrive in the same package.

A large home can also be eye-catching. But, behind it there may be a first mortgage, a second mortgage, and a line of credit stacked on top, with the equity refinanced out again and again over the years to cover other debts, a renovation, or simply to keep cash flow going. Add a tax lien recorded against the property, and the house that looks like proof someone made it may actually be carrying more debt than it is worth. A $500,000.00 home with $250,000.00 in equity is a stronger financial position than a $1,000,000.00 that has a $900,000.00 mortgage and a $50,000.00 tax lien (but it less photogenic and eye catching).

The cycle of debt is regularly growing. Increasing mortgage debt for a purchase makes sense, because prices go up. But when people refinance and take cash out, or take a second mortgage, they are tapping equity to cover something else. Nationally, home equity borrowing has been rising for three straight years. Owning an impressive home and having real financial breathing room are not the same thing, and you usually cannot tell which is which from a photo.

Social media is a highlight reel. People post their best moments, not their bank statements. So when you compare your real, messy, complete financial picture to everyone else’s carefully chosen highlights, of course you feel like you are losing. You are comparing your behind-the-scenes to their trailer. The truth is that a lot of those thriving lives are propped up by the exact same pressures you are feeling, and in many cases by more debt than yours. Our office often sees the other side of those pictures. We see people with six-figure incomes who cannot make it from one paycheck to the next. We see beautiful homes with almost no usable equity, expensive cars that are $20,000.00 underwater, and excellent credit scores maintained only because every extra dollar is going toward minimum payments. None of those things show up on Instagram (and they often never come up in conversation).

More people are struggling than you would ever guess

This is not just something we sense across the desk. The numbers back it up. Total household debt reached $18.8 trillion at the end of the first quarter of 2026, according to the Federal Reserve Bank of New York, growing by roughly $4.6 trillion since the end of 2019. WalletHub, which adjusts that same data for inflation, puts the average household’s total debt at roughly $151,000. This means six figures of debt is typical for the average household.

Not all of that should worry you, and separating the parts matters. Mortgage debt rises as home values rise, which is normal and by itself says nothing about whether a household is in trouble. What tells you more is what people are doing with the equity underneath it. Home equity line of credit balances have climbed to about $446 billion, a third straight first-quarter increase. When someone borrows against a house to cover other things, it usually means the other things stopped being coverable out of income.

Credit cards tell a similar story. For accounts actually carrying a balance, the average interest rate now runs above 22%. Carrying a balance at that rate is not a personal failing. It is a math problem that gets harder every month whether or not you do anything wrong.

Then there is the part nobody posts about. Bankruptcy filings rose 11.9% over the twelve months ending March 31, 2026, with consumer filings climbing from roughly 506,000 to roughly 566,000. Filings have increased every quarter since mid-2022. In a single recent quarter, about 124,000 people had a bankruptcy notation added to their credit report. Close to half a million people a year.

Researchers point to the same causes we hear about every day. Inflation that has not fully eased; we all are dealing with high interest rates. The rising cost of ordinary life, including groceries, rent, childcare, and healthcare. Here in Northern Virginia, the financial pressure is amplified. The cost of living is relentless, and incomes have not always kept pace. The people our office sees are not who most folks picture when they imagine someone in financial trouble. They are nurses, federal employees, teachers, small business owners, engineers, retirees, and young professionals. A growing number are younger adults, and it usually has nothing to do with irresponsibility. It has to do with how expensive ordinary life has become.

If you knew how many of the people around you, your coworkers, your neighbors, and the parents at school pickup, were quietly carrying the same kind of stress you are, you would feel a lot less alone. They just are not posting about it either. Most people will tell you about the promotion, the new house, or the dream vacation. Very few will tell you they put that vacation on a credit card, borrowed against their home to renovate the kitchen, or spent the entire drive home wondering how they are going to make next month’s mortgage payment. Financial stress still carries a tremendous amount of shame, so people hide it. Even close friends and family often have no idea someone is struggling until there is a foreclosure, a lawsuit, or a bankruptcy filing. By then, they assume the problems appeared overnight, when in reality the financial pressure had usually been building quietly for years. This silence about struggling finances creates the illusion that everyone else has it together, when in reality many of the people around you are dealing with the very same worries, they simply are not talking about them.

Feeling alone is the thing that keeps people stuck

When people believe they are the only one struggling with debt, they stay silent. They do not ask questions. They put off getting advice because admitting the problem out loud feels worse than living with it. And while they wait, things that were fixable often get harder.

The first step out is almost always just realizing the problem is not a personal failing; it is a situation, and situations have solutions.

The second thing that keeps people stuck: bankruptcy seems complicated

Once people do start looking for a way out, a new wall goes up. They start researching bankruptcy and immediately feel overwhelmed. Chapters and means tests and exemptions and trustees and schedules read like a foreign language, and the fear of getting it wrong sends them right back to doing nothing.

Bankruptcy can look far more complicated from the outside than it actually is for you. Hiring an attorney takes a significant burden off your shoulders. If you file Pro Se (or without an attorney), it can be very complicated, but with an attorney you do not have to understand the entire Bankruptcy Code. A good attorney guides you through the process and apply specific details of your case to the Bankruptcy Code. Your job is to be honest about your situation and gather your documents. The attorney puts everything together and flags any potential issues.

Much of what makes bankruptcy seem so frightening is built on perceptions that simply are not true. Here are the ones we hear most often, and the reality behind each.

👉 For More Information: Top 17 Bankruptcy Myths and 7 Virginia Bankruptcy Myths That Keep People in Debt

Perception: “If I file, I will lose everything”

This is the fear that stops more people than any other. The image of losing the house, the car, the furniture, all of it.

Reality: Bankruptcy is built around exemptions, which are categories of property the law specifically lets you keep. Most Chapter 7 cases are no-asset cases, meaning the filer keeps everything they own. Virginia’s exemptions are designed to protect the things people actually need to live and work, including home equity, a vehicle, household goods, and tools of the trade. “You lose everything” is simply not how the system is designed to work.

👉 For More Information: What Do People Actually Lose in Chapter 7?, Do I Qualify for Chapter 7 Bankruptcy?, and The Virginia Homestead Exemption

Perception: “Bankruptcy will ruin my credit forever”

A lot of people assume filing is a permanent mark, and that they will never be approved for anything again.

Reality: A bankruptcy does appear on your credit report, generally up to 10 years for a Chapter 7 and 7 years for a Chapter 13. But “on your report” and “ruined forever” are not the same thing. For many people, their credit is already badly damaged by the time they come in. Filing stops the bleeding, and a lot of clients are surprised to see their score begin recovering within a year or two when they rebuild responsibly. We routinely work with people who go on to finance a car and, after the standard waiting periods, qualify for a mortgage.

Perception: “Only irresponsible people file for bankruptcy”

There is deep shame attached to this one. People worry that filing means they failed.

Reality: The clients we see are overwhelmingly responsible people who got hit by something outside their control. A medical event, a job loss, a divorce, a business that did not survive, or simply years of high Northern Virginia costs outrunning their income. Bankruptcy is not a moral verdict. It is a legal tool, written into federal law, meant to give honest people a fresh start. Using a tool that exists for exactly your situation is responsible, not reckless.

Perception: “Everyone will find out”

Many people imagine their name in the paper, their employer notified, or neighbors somehow learning what they did.

Reality: A filing is technically part of the public court record, so it is not secret in a legal sense. But in practical terms, almost no one finds out unless you tell them. There is no public announcement and no one combing court filings for your name. The people who get notified are your creditors, meaning the companies you already owe.

Perception: “Bankruptcy wipes out all my debt”

This is the opposite assumption, and it is overly optimistic. One filing does not erase every dollar.

Reality: Bankruptcy is powerful, but it is not a magic eraser. Certain debts generally survive a filing, including:

• Most student loans, absent a separate and fact-specific hardship showing
• Recent income taxes that do not meet specific timing rules
• Domestic support obligations like child support and alimony
• Many court fines and certain penalties
• Debts tied to fraud or willful misconduct

Whether a debt survives depends on the details, which is exactly why your specific situation deserves a real look.

👉 For More Information: Does Bankruptcy Clear All Debt?

Perception: “You can never get rid of taxes or government debt like SBA loans”

This is one of the most common and most costly misunderstandings we encounter. People assume that anything owed to the government is permanent, so they never even ask.

Reality: The assumption that government debt is never discharged keeps people paying on debt they may not owe. Many income taxes can be discharged once they meet specific timing and filing requirements. Government-backed debt is not automatically off limits either. SBA loans, including many COVID-era EIDL loans, are often treated like other unsecured debts and can be discharged in the right circumstances.

Two things shape the analysis: 1) Debt obtained through misrepresentation generally cannot be wiped out; and 2) Where a loan is secured by collateral, the lien survives even when your personal obligation is discharged, which means you would still need to deal with the lien to keep the asset. Discharging the debt and keeping the collateral are separate questions.

The threshold question is whether the debt is yours at all. If a business owes money and you never personally guaranteed it, the debt belongs to the business, not to you. But many SBA loans require a personal guarantee, which puts the owner on the hook even though the money went to the business. EIDL loans are a partial exception, since that program required a personal guarantee only in limited circumstances.

There is also a specific analysis that is required for tax debt. Certain business tax obligations can be assessed against an individual personally, most commonly the trust fund portion of unpaid payroll taxes, meaning the money withheld from employee paychecks. Personal liability there does not depend on any guarantee you signed. It attaches to whoever was responsible for remitting the money.

One caution on that point: Establishing personal liability for a trust fund obligation does not make it dischargeable. Trust fund taxes do not go away in bankruptcy, regardless of age. Other business taxes may be treated differently, which is exactly why the specifics matter.

The blanket belief that government debt can never be discharged is wrong often enough to be worth checking.

👉 For More Information: Managing Tax Debts Through Bankruptcy and Can Bankruptcy Discharge Tax Debt?

Perception: “I should drain my retirement before I file”

People often try everything first, including cashing out a 401(k) or IRA to throw at credit card balances.

Reality: This is one of the most painful patterns we see, because it is often backward. Qualified retirement accounts are generally protected in bankruptcy, which means someone can frequently discharge their unsecured debt and keep their retirement intact. Draining a protected asset to pay debt that could have been wiped out, often triggering taxes and penalties along the way, can leave a person worse off on both ends. If you are thinking about pulling from retirement to stay afloat, have that conversation before you do it, not after.

Perception: “I make too much money to file”

Some people assume a solid Northern Virginia salary disqualifies them automatically.

Reality: Income matters, but it is not a simple cutoff. Chapter 7 involves a means test that weighs income, household size, and certain expenses, and plenty of people who assume they earn too much actually qualify once the full picture is considered. Even when someone does not qualify for Chapter 7, Chapter 13 may be a strong fit, letting them reorganize debt into a manageable plan.

👉 For More Information: How the Means Test Works, How a Chapter 13 Plan Is Calculated, and Chapter 13 Bankruptcy Myths, Busted

Perception: “The process will be long, painful, and humiliating”

The mental image is a courtroom, a stern judge, and an interrogation about every dollar you have ever spent.

Reality: A typical consumer case is far more routine than that. Most people never see a judge. The main appearance is the meeting of creditors, known as the 341 meeting, which is usually short, handled by a trustee, and far less intimidating than people expect. Much of the rest is paperwork and preparation handled with your attorney, not a public spectacle.

Some reasons to wait are real

A post that argues only one direction reads as a sales pitch, so we want to be clear that we tell people not to file with some regularity.

If you expect a significant change in income soon, timing may matter. If you recently moved to Virginia, the exemptions that apply to you may not be Virginia’s yet. If you have transferred property to a family member recently, discuss it before anything is filed rather than after. If your tax debt is close to meeting the timing rules but has not yet, waiting a few months can be the difference between discharging it and paying it. And if your debts are the kind bankruptcy does not reach, filing may not solve your problem at all.

Those are real reasons, and they are different in kind from the perceptions above. Real reasons hold up when you examine them. The others dissolve.

Why this all matters

Here is the part that genuinely concerns us. Two beliefs keep people trapped longer than anything else: “I am the only one going through this,” and “bankruptcy is too complicated and scary to even look into.” Both are false.

People often internalize these beliefs of being the only one struggling with debt, and they often do the things that actually make a case harder. Running up new debt. Paying back a family member while ignoring other creditors. Draining protected retirement. Letting a garnishment take money that could have been protected. Enrolling in a debt settlement program that will not finish. Almost none of it comes from bad intent. It comes from fear and isolation.

The moment someone realizes they are not alone, and that the process is far more manageable than it looks, is usually the moment things start getting better.

Key takeaways

• The isolation people feel is largely an illusion created by everyone else’s highlight reel. You are comparing your full reality to other people’s best moments.
• The new car every few years often hides a bigger payment and a loan that is underwater, not the financial ease it projects.
• Far more people are struggling than you would ever guess. Household debt is at a record, and bankruptcy filings have risen every quarter since mid-2022.
• Bankruptcy looks impossibly complex from the outside, but you do not have to master it. Your attorney is there for exactly that.
• Even taxes and government debts like SBA loans are not always permanent. The only way to know is to ask.
• Some reasons to wait are legitimate, and a good attorney will tell you when waiting is the better move.
• The first step out is almost always just talking to someone honest about where you actually stand.

You are not alone, and it is not as bad as it looks

A lot of what our office does is simply replace fear and isolation with facts. We walk people through what would actually happen in their situation, not the worst-case version they have been carrying around. There is no charge to find out where you really stand, and most people leave that first conversation feeling lighter than they have in a long time.

You do not have to keep carrying this by yourself. Call our Chantilly office at (703) 880-4881 or our Manassas office at (703) 880-4227. Our office has professionals who speak both English and Spanish.

📍 4100 Lafayette Center Dr, Suite 106, Chantilly, VA 🌐 AFMorganLaw.com

FAQs

I feel like I am the only one struggling. Is that true?

No, and it is one of the most common things we hear. Household debt is at a record high, and consumer bankruptcy filings have risen every quarter since mid-2022. Many people who appear to be doing well are carrying significant debt of their own. Financial stress is far more widespread than social media makes it look.

Bankruptcy seems really complicated. Do I have to understand all of it?

No. You do not need to learn the Bankruptcy Code. Your part is being honest about your situation and gathering documents. Your attorney handles the legal machinery.

Can taxes or SBA loans be discharged in bankruptcy?

Sometimes. Many income taxes can be discharged when they meet specific timing rules, and SBA loans are often treated like other unsecured debts. A lot depends on whether you are personally liable for the debt. Many SBA loans carry a personal guarantee, and certain business taxes can be assessed against an individual. Exceptions also apply, such as secured loans and debts tied to misrepresentation, so review the specifics with an attorney.

Should I cash out my retirement to pay down debt first?

Usually not, and this is worth a conversation before you do anything. Retirement accounts are generally protected in bankruptcy, so draining one to pay debt that could have been discharged can leave you worse off twice over, once from the lost savings and again from the taxes and penalties.

Should I use my home equity to pay off credit card debt?

Be careful here. Moving credit card balances onto a home equity line converts unsecured debt into debt secured by your house. The rate looks better and the monthly payment usually drops, so it feels like progress. What actually happened is that debt bankruptcy could have discharged is now attached to the roof over your head. We see this often, frequently about a year before the person comes in anyway. Have the conversation before you do it.

Do I have to be behind on my payments to file bankruptcy?

No. Nothing requires you to default first. Some people file while current on everything, because they can see that staying current means paying minimums for the next twenty years. Waiting until you fall behind does not improve your case. It usually just adds late fees, penalty rates, and collection calls to the same situation.

How much debt is too much?

There is no number. What matters is the relationship between what you owe and what your household can actually pay. Here is a useful test. If you made only your required minimum payments, how long until the balances reach zero? If the answer is more than five years, or if you cannot get a clear answer at all, the current plan is not a plan. Our post on the six-month rule walks through that math.

Will I really lose my house or car if I file?

In most consumer cases, no. Exemptions are designed to protect the property you need, and many filers keep everything they own. Whether a specific asset is fully protected depends on factors like equity and property type.

How long does bankruptcy stay on my credit report?

Generally up to 10 years for a Chapter 7 and 7 years for a Chapter 13, though many people see their credit begin recovering well before that once the underlying debt is resolved.

Do I have to go to court and see a judge?

Usually not. Most consumer filers never appear before a judge. The main appearance is the meeting of creditors, which is generally brief and handled by a trustee.