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5 Major Reasons To File For Bankruptcy

Todays Date: August 19, 2017

Bankruptcy basically means a legal declaration that an individual or business no longer pay their debts to those they owe money from. There are many causes why people would decide to declare bankruptcy, and here are some of the top causes:

1. Loss of a job – One of the most common reasons people file for bankruptcy is because a job loss. The current bad state of the economy has made a lot of people to leave their work, and therefore leaving them unable to provide for themselves and their family. Getting the boot may also mean losing insurance that would’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. Today, medical costs are really expensive 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 – 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. 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 get rid of your property mortgage, but it can stop foreclosure before sales or bidding will occur. It will then let you to repay the mortgage arrears, or the mortgage amount left.

5. Stop creditors’ harassing calls and behavior – A lot of times, creditors tend to do debt collection in an unpleasant manner. Their abusive and oftentimes annoying behavior is very uncalled for, 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 the legal department is of course the best way to handle whatever bad financial situation you may have.

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