Top Reasons People File Bankruptcy
People file bankruptcy for many unique reasons. Very few people file bankruptcy when they can pay their bills. The bankruptcy changes made in 2005 prevent this from taking place. These are the five biggest reasons people think about filing bankruptcy:
Medical Bills
Recent illness or an unfortunate accident can ruin a family’s finances in short order. Especially if no health insurance is accessible. Income can even be further affected by the injured family member losing work. Which leads us to the next common reason people file bankruptcy.
Job Loss
Job loss and layoffs can put people in a financial disaster quickly, particularly if they were living paycheck to paycheck while employed. Unemployment benefits only last so long, and are typically a fraction of previous earnings.
Stop Foreclosure
A chapter 13 bankruptcy can produce a payment plan to catch up on late mortgage payments and stop foreclosure. Filers can include overdue mortgage payments and legal fees into the bankruptcy repayment plan, permitting filers to keep their home and create a workable payment plan.
Stop Wage Garnishments and Repossessions
Garnishments can be stopped by filing a ch 7 bankruptcy. , including the overdue payments in a ch 13 can stop repossessions and even get your property returned after repossession if filed in time.
Stop Creditor Harassment
Creditors can no longer contact you once you have file bankruptcy papers. Phone calls stop immediately giving you time to breathe and get your finances in order.
The stigma related to bankruptcy is no longer apparent in today’s World. Since unemployment rates are rising due to the economy right now, more and more people will be filing bankruptcy.
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