Bankruptcy is not something that anyone wants to go through, but sometimes it is necessary in order to get a fresh start and regain control of your finances. Here are the top 10 reasons you may need to file for bankruptcy.
1. Wage Garnishment
If you are behind on your debts, your creditors may seek a court order to garnish your wages. This means that a portion of your paycheck will get automatically deducted and sent to your creditors, making it even more difficult to pay your bills. Filing for bankruptcy can stop wage garnishment and help you get back on track financially.
If you fall behind on your car payments, your car lender may start repossession proceedings. Repossession can be a stressful experience, as it can lead to the loss of a vehicle you need to get to work further jeopardizing your financial situation. Bankruptcy can help stop repossession proceedings and provide a way for you to catch up on missed payments.
3. Harassment from Creditors
If you fall behind on your debt payments, you may be subjected to harassment from creditors. This can include phone calls, letters, and even lawsuits. Bankruptcy can help stop creditor harassment and provide a way for you to eliminate or restructure your debts.
4. Medical Bills
If you have an injury or illness that has created the weight of medical debt, bankruptcy could help you get out from under it. One of the most common reasons people file bankruptcy is because of medical bills. Even with insurance, medical expenses can be incredibly high, and a serious illness or injury can quickly lead to overwhelming debt. In fact, a study by the American Journal of Public Health found that medical debt was a factor in 62% of all bankruptcies.
5. Job Loss
Losing a job can be devastating, both emotionally and financially. Without a steady income, it can be difficult or impossible to keep up with bills and debt payments. Even if you find a new job quickly, it may not pay as much as your previous job, making it difficult to catch up on missed payments. Bankruptcy could help you get back on track until you find a new job or one that supports your financial needs.
6. Credit Card Debt
Credit card debt can quickly spiral out of control, especially if you are only making minimum payments. High interest rates and fees can make it difficult to pay down the balance, and before you know it, you are drowning in debt. Bankruptcy can help eliminate credit card debt and provide a fresh start for those struggling with high levels of debt.
If you are behind on your mortgage payments, your lender may begin the foreclosure process. Foreclosure can be a long and stressful process, and it can also leave you without a place to live. Filing for bankruptcy can help stop foreclosure and give you time to get caught up on missed payments.
Divorce is another common reason people file for bankruptcy. The cost of a divorce can be significant, with legal fees, property division, and spousal and child support all adding up quickly. In addition, going from a two-income household to a one-income household can be a major financial strain. Bankruptcy can help ease the financial strain by eliminating or restructuring debts that were incurred during the marriage and after the divorce.
9. Student Loans
Student loan debt is a growing problem in the United States, with many individuals struggling to repay their loans. While in the past student loans could not be discharged in bankruptcy, certain rules were recently changed, making student loan bankruptcy discharge more possible. But, even if you cannot have your student loans discharged, bankruptcy could help eliminate other debts which would free up funds to make student loan payments.
10. Unexpected Expenses
Sometimes unexpected expenses arise, such as a car repair or home repair, that can be difficult to pay for. If you don’t have an emergency fund or the expenses are too high, you may find yourself in debt. Filing for bankruptcy can help you eliminate this debt and start rebuilding your finances.
Getting Help Filing Bankruptcy
There are many reasons people may need to file for bankruptcy. While bankruptcy is not a decision to be taken lightly, it can be a valuable tool for those who are struggling with overwhelming debt. If you are considering bankruptcy, it is important to consult with a qualified bankruptcy attorney to make sure that bankruptcy is the right choice for you. A bankruptcy attorney can help you navigate the complex process of filing for bankruptcy and can advise you on the best course of action for your specific financial situation.
Brock and Stout’s bankruptcy attorneys have over 27 years of experience helping clients get a financial fresh start through bankruptcy. Contact us for a free evaluation of your financial situation to see if we can help you. Let our family help your family on the road to financial recovery.