5 Major Reasons To File For Bankruptcy
12:57 AM
A legal declaration that an individual or business can no longer pay their debts is known as bankruptcy. There are many reasons why people would decide to declare bankruptcy, and here are some of the top reasons:
1. Job loss - One of the most common reasons people choose to go bankrupt is because a job loss. The economy's current bad state has forced a lot of people to leave their work, and therefore leaving them unable to provide for themselves and their family. Losing a job may also mean losing insurance that could've been provided by their employer.
2. Medical bills - Sometimes, loss of insurance, a terrible accident or unexpected illnesses can be enough reason for a person to file for bankruptcy. These days, medical costs are really high and could pile up to inconceivable amounts. Filing for Chapter 7 Bankruptcy can greatly reduce or even completely eliminate these debts.
3. Preventing repossession of properties - Be it a car, your home, or any other highly valuable item that has been repossessed, filing for Chapter 13 bankruptcy could force the creditor to return said items to you. After this, your past missed payments will be consolidated into your bankruptcy plan. What will happen is you will give monthly payments to the trustee of your bankruptcy plan, and they in turn will pay the finance company.
4. Catch up on missed mortgage payments and stop home foreclosure - Filing for Chapter 13 Bankruptcy won't eliminate your property mortgage, but it will stop foreclosure before sales or bidding can occur. This can then allow you to repay the mortgage arrears, or the mortgage amount left.
5. Put a halt to harassing calls and behavior from creditors - A lot of times, creditors tend to do debt collection in a not-so-nice manner. Their abusive and oftentimes annoying behavior is very unnecessary, and in fact, unethical. Filing for bankruptcy can put a stop to the demands of many creditors, thus ending the many harassing phone calls and bad behavior.
There are many other reasons to file for bankruptcy. Consulting with your lawyer is of course the best way to handle whatever bad financial situation you may have.
1. Job loss - One of the most common reasons people choose to go bankrupt is because a job loss. The economy's current bad state has forced a lot of people to leave their work, and therefore leaving them unable to provide for themselves and their family. Losing a job may also mean losing insurance that could've been provided by their employer.
2. Medical bills - Sometimes, loss of insurance, a terrible accident or unexpected illnesses can be enough reason for a person to file for bankruptcy. These days, medical costs are really high and could pile up to inconceivable amounts. Filing for Chapter 7 Bankruptcy can greatly reduce or even completely eliminate these debts.
3. Preventing repossession of properties - Be it a car, your home, or any other highly valuable item that has been repossessed, filing for Chapter 13 bankruptcy could force the creditor to return said items to you. After this, your past missed payments will be consolidated into your bankruptcy plan. What will happen is you will give monthly payments to the trustee of your bankruptcy plan, and they in turn will pay the finance company.
4. Catch up on missed mortgage payments and stop home foreclosure - Filing for Chapter 13 Bankruptcy won't eliminate your property mortgage, but it will stop foreclosure before sales or bidding can occur. This can then allow you to repay the mortgage arrears, or the mortgage amount left.
5. Put a halt to harassing calls and behavior from creditors - A lot of times, creditors tend to do debt collection in a not-so-nice manner. Their abusive and oftentimes annoying behavior is very unnecessary, and in fact, unethical. Filing for bankruptcy can put a stop to the demands of many creditors, thus ending the many harassing phone calls and bad behavior.
There are many other reasons to file for bankruptcy. Consulting with your lawyer is of course the best way to handle whatever bad financial situation you may have.
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