Top Five Reasons Why People File For Bankruptcy
Today’s world is a lot tougher financially than it was a few years ago. Many people are struggling to make it as the economy is still not fully recovered, the job market is not rebounding yet, and people are just plain short on their bills. In times like these, people try to find ways to free them from their financial situation so that they can begin to re-build it again.
A legal declaration that a person or business can no longer pay their debts is known as bankruptcy. There are many causes why people would decide to declare bankruptcy, and here are some of the top causes:
Top Five Reasons Why People File For Bankruptcy
1. Loss of a job - One of the most common causes why people opt to file for bankruptcy is because they lost their job. The current bad state of the economy has made a lot of people to leave their work, and therefore leaving them incapable of providing for themselves and their family. Getting the pink slip may also mean losing insurance previously 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 expensive and could pile up to unimaginable amounts. Filing for Chapter 7 Bankruptcy can greatly reduce or even completely eliminate these debts.
3. Preventing repossession of properties - If your home, car, or other highly valuable possession of yours is being repossessed, filing for Chapter 13 bankruptcy could force the creditor to return the aforementioned items to you. After this, your past missed payments will be consolidated into your bankruptcy plan. You will no longer pay to your creditors, but to your trustee instead. In turn, they will pay the finance company for you.
4. Stop home foreclosure and catch up on missed mortgage payments - Filing for Chapter 13 Bankruptcy won’t get rid of your property mortgage, but it can stop foreclosure before bidding or sales will occur. It will then allow you to repay your mortgage arrears, or the mortgage amount left.
5. Put a halt to creditors’ harassing calls and behavior - Oftentimes, creditors tend to do debt collection in an unpleasant manner. Their abusive and frequently annoying behavior is very uncalled for, and in fact, unethical. Filing for bankruptcy can put on hold the demands of many creditors, thus halting the many harassing phone calls and bad behavior.
There are plenty of other reasons to file for bankruptcy. Consulting the legal department is of course the best way to handle whatever bad financial situation you may have and see what options are available to people who are burden with lots of debt and need help to reduce their debt to avoid bankruptcy.
Learn more about the best legal assistance from qualified and knowledgeable Family Lawyer and Litigation Lawyer for the resolution of your legal concerns.
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It is so very easy to slip into an economic situation whereby there is just no money to pay others to stay alive.
Food, shelter, clothing, transportation. So basic to life, and yet so easily lost with just the smallest change in the economic winds.
Even if our source of income collapses, others still need money from us to carry on with their lives.
Happily, instead of debtors jail, the US has seen fit to be understanding about conditions beyond our control.
On the other hand, there are those who shop when they have no money, and then shop some more for things unnecessary to feed and clothe and shelter themselves.
It is that behavior that the most recent changes in the bankruptcy laws are meant to address.
Being without funds due to no fault of our own is unfortunate. Being without funds due to our own lack of discipline should also meet with a degree of mercy, but at a level one step short of full forgiveness. Otherwise there is no incentive for the financial wastrel to do better next time.
I know the lose of a job can be devistating but in these hard economic times people need to live within their means and be willing to do without a few things.
I work for a bankruptcy attorney and you are stop on the issues which surround bankruptcy. I have seen many different types of cases and virtually all of them boil down to your list of 5 in some fashion. People often connote negative things with filing bankruptcy and it certainly should not be taken lightly, but it is also an opportunity for renewal both personal and financial.
Good Post, I am a big believer in commenting on blogs to let the blog writers know that they’ve added something worthwhile to the world wide web!