Financial situations vary from person to person. People who have been responsible and fortunate their entire lives sometimes find themselves in a difficult position. Unexpected life events can drive anyone to bankruptcy, even if you never considered it an option. Despite the variety of circumstances that can trigger bankruptcy, there are certain things that appear more often than not in bankruptcy cases. In some cases, a single financial emergency drives a person’s decision to file, while for others, a collection of unfortunate things occur and there is no choice left but to file.
If you are faced with any of the following, you are not alone. The list below includes the top reasons people choose bankruptcy. When one or more of these situations occurs in your life, you might have no choice but to file for bankruptcy.
1. You Lack the Financial Means to Pay Your Debt
Obviously, people file for bankruptcy because they cannot afford to pay their bills. When debt accumulates and there is not enough money available to make payments, you must make a choice. Often this situation arises outside of a person’s control from either: reduced hours at work, a new financial status quo because of a divorce or simply the creditors raised your interest rates. Bankruptcy makes it possible to reorder debt and get your situation under control. In some cases, debt will be discharged and you will never need to pay what you owed. In others, you will be given an opportunity to pay, but it will be without late fees and other penalties and in some cases might even be a fraction of the total amount you owe.
2. You Face Foreclosure on Your Home
Some types of bankruptcy allow you to stop the foreclosure process, at least temporarily. Mortgage debt cannot be erased, but you can request an extension in the time you have to bring your payments up to date. This makes it possible for you to remain in your home and get things back on track. It also makes it possible to discharge some of your other debt, so you are able to put the money you do have toward your mortgage payments.
3. Creditor Harassment is a Daily Part of Your Life
Creditors are relentless when money is owed to them. Though laws govern what they can and cannot do to collect a debt, it does not stop them from creating problems in your life. People sometimes choose bankruptcy to put an end to the non-stop calls, the contact at their workplace, and the demands that large sums of money be paid immediately. When the harassment becomes too much to handle, many people use bankruptcy to stop contact with creditors.
4. You Lost Your Job
Losing your job is a devastating experience and makes it difficult to make ends meet. When your income is drastically reduced or eliminated all together, you have very few options for paying your bills. Debt mounts up fast when you miss payments and before you know it, bankruptcy becomes your only option.
5. You Have Medical Bills You Cannot Afford to Pay
Medical emergencies are one of the most common causes of bankruptcy. It is sometimes coupled with the loss of a job, which means the loss of health insurance for many, so financial woes are complicated even more. Bankruptcy makes it possible to extend the amount of time you have to repay medical expenses, and in some cases, it discharges the debt completely. It is one of the easiest ways to make a difficult situation that often includes health concerns, as well as financial concerns, a little better.
If you are facing any of these situations or anything else that has created severe financial hardship, we can help. Contact Frank J. LaPerch, PC for information about what you can do to get your financial life back in order.