There are several reasons to file bankruptcy. Debtors usually choose to file either Chapter 7 bankruptcy protection or Chapter 13 bankruptcy protection. Most of the time the reasons are valid. However, it is important to discuss your current financial situation with an experienced attorney in your state. The bankruptcy will typically help relieve some of the financial stress you are going through, or help protect against the loss of any assets.
The following are several reasons why many people decide to file for bankruptcy protection.
Out of Control Credit Card Debt
Seeking revenge from out of control credit card debt is one of the most common reasons to file bankruptcy. Unfortunately, most consumers owe more money to major credit card companies than they will ever be able to repay. The reason for the accumulating debt is not always because of irresponsibility on the debtor’s part. Sometimes, the interest rates are too high, or there is a loss of employment.
Medical Issues/Loss of Income
Similar to the first reason listed, unemployment and prolonged illness can make it very difficult for someone to keep up with their daily living expenses. The inability to pay bills can lead to the overuse of credit cards.
Delinquent Mortgage Payments
When the economy becomes unstable, larger debt such as mortgage payments may get paid later than they are supposed to or not paid at all. Once you are delinquent with a few payments, it can be very difficult to get the payments back on track.
Unfortunately, the bank is not obligated to receive half or partial payments, and can demand that the borrower pays in full if one payment is missed. Chapter 13 bankruptcy can help save the home from foreclosure if the payments are behind. A knowledgeable bankruptcy attorney will be able to determine the options that are available to you so you can repay or modify your home loan.
Individuals may file bankruptcy during a divorce when financial situations are unstable. Household income typically decreases after a divorce, and debt is often not divided equally among parties.
These are just a few of the many reasons to file bankruptcy. It is best to seek the services of a reputable lawyer before you start the filing process.
Having a knowledgeable attorney by your side and armed with the right information can give you the financial solution you are looking for. Contact an attorney at Douglas Jacobson Law Firm to discuss your case.