Declaring bankruptcy is a tough decision. If you are considering filing for bankruptcy, you are definitely thinking about the challenges that it poses. It takes time and money to go through the process; it requires you to disclose your financial situation to others, and it will take an emotional toll. It affects not just you as an individual, but may have an impact on your loved ones as well.
Fortunately, bankruptcy can provide relief in some stressful situations. Filing is the first step to getting back on track and securing a brighter financial future. Here are the top 10 reasons for which we would recommend it.
Mounting Medical Debt
If you or a family member has had chronic or serious health issues, you know how fast medical bills can add up. Plus, there is often lost income due to illness and the added expense of travel for treatment, medical equipment and in-home care. Family members may also miss work to help with caretaking and appointments. It can seem impossible to get out from under the debt. Collectors for healthcare providers can be unrelenting, sometimes taking legal action through a lawsuit or wage garnishing.
Regardless of the nature or amount of a lawsuit, losing a law suit and the resulting impending garnishment or bank attachment can make bankruptcy the only real choice.
For homeowners struggling with mortgage payments, Chapter 13 bankruptcy can stop foreclosure and effectively give you time to catch up on loan payments.
Debt Repayment After Divorce
Getting a divorce can wreak havoc on your finances and one spouse may find themselves required to repay a large sum of debt. If they are unable to do so, qualifying for Chapter 7 bankruptcy may discharge some of that amount. Another option is to define a realistic repayment plan through Chapter 13 bankruptcy.
Losing Your Job or Lower Income
If you have been laid off, have been out of work for some time, or had your wages cut, you know that the bills pile up quickly. Suddenly, paying car loans and mortgages can become a big struggle. Bankruptcy may be the right option for you to help manage the payments and give you time to get caught up before the problem gets worse.
Small Business Debt
If your small business can’t keep up with regular loan payments and other expenses, it is basically bankrupt already or heading that way. Declaring bankruptcy allows business owners to keep the activity open and continue to earn income while working to find a financial solution. Your bankruptcy lawyer will push to reorganize, consolidate and negotiate better terms of the debt owed. Filing for bankruptcy might actually save your business.
Failed Business Debt
Similarly, if a venture to start a company is not successful, it is heartbreaking and it can also result in a lot of debt. Plus, the lack of income exacerbates the problem when the loan payments are due. There are special rules permitting people in this situation to qualify for a Chapter 7 bankruptcy. Chapter 13 bankruptcy, on the other hand, allows business owners to keep the assets that they have invested in while following a set repayment schedule. Your bankruptcy attorney will guide you to getting the debt discharged.
Creditor Has Garnished Your Wages
Aggressive creditors can take action on the debt you owe by placing a lien on your property or garnishing wages. Filing for bankruptcy can block these actions and give you time to get your finances in order. The best advice, however, is to file before creditors take you to court.
Overwhelming Student Debt
This is predicted to be a large problem for younger generations of debtors. As student loan payments soar and job opportunities and salaries stagnate, new graduates often find themselves in over their head. Filing for Chapter 13 may be a valid option for managing excessive student debt.
Growing Consumer Debt
Credit card debt is a common issue these days and it can be damaging to your personal finances, as well as your credit score. When someone struggles to make the minimum payments, interest and late charges quickly add to the amount owed. It can become a vicious cycle. In many cases, filing for Chapter 7 bankruptcy provides a new start for the debtor by wiping out the mounting sum.
Bankruptcy never sounds like a great solution, but in reality, it can be a valuable tool for fixing some serious financial problems. A good attorney will be able to advise you on the best option for you.
Professional Consultations for Your Financial Future
If you are worried about your financial situation, request a consultation to discuss your options. The bankruptcy lawyers at Amourgis & Associates will help you determine the best course of action for securing your financial future. Call our legal office at (330) 535-6650.