Bankruptcy basically means a legal declaration that a person or business can't pay their financial obligations to those they owe money from. There are many reasons 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 choose to go bankrupt is because a job loss. The economy's current critical state has forced a lot of people to leave their work, and therefore leaving them unable to provide for themselves and their family. Losing a job may also mean losing insurance previously provided by their employer.
2. Medical bills " Sometimes, a terrible accident, illness or even just the loss of insurance caused by job loss, can be enough reason for a person to file for bankruptcy. These days, 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 " Be it a car, your home, or any other highly valuable item that has been repossessed, filing for Chapter 13 bankruptcy could force the creditor to return said items to you. After this, your past missed payments will be merged into your bankruptcy plan. You will no longer pay to your creditors, but to your trustee instead. In turn, they will pay the finance company for you.
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 bidding or sales can occur. It will then allow you to repay the mortgage amount left (also called mortgage arrears).
5. Put a halt to harassing calls and behavior from creditors " A lot of times, creditors tend to do debt collection in a not-so-nice manner. Their abusive and oftentimes annoying behavior is very unneeded, and in fact, unethical. Filing for bankruptcy can put a stop to the demands of many creditors, thus halting the many harassing phone calls and bad behavior.
There are plenty of other reasons to file for bankruptcy. Of course, the best way to handle whatever bad financial situation is to consult a lawyer.
1. Loss of a job " One of the most common reasons people choose to go bankrupt is because a job loss. The economy's current critical state has forced a lot of people to leave their work, and therefore leaving them unable to provide for themselves and their family. Losing a job may also mean losing insurance previously provided by their employer.
2. Medical bills " Sometimes, a terrible accident, illness or even just the loss of insurance caused by job loss, can be enough reason for a person to file for bankruptcy. These days, 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 " Be it a car, your home, or any other highly valuable item that has been repossessed, filing for Chapter 13 bankruptcy could force the creditor to return said items to you. After this, your past missed payments will be merged into your bankruptcy plan. You will no longer pay to your creditors, but to your trustee instead. In turn, they will pay the finance company for you.
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 bidding or sales can occur. It will then allow you to repay the mortgage amount left (also called mortgage arrears).
5. Put a halt to harassing calls and behavior from creditors " A lot of times, creditors tend to do debt collection in a not-so-nice manner. Their abusive and oftentimes annoying behavior is very unneeded, and in fact, unethical. Filing for bankruptcy can put a stop to the demands of many creditors, thus halting the many harassing phone calls and bad behavior.
There are plenty of other reasons to file for bankruptcy. Of course, the best way to handle whatever bad financial situation is to consult a lawyer.
About the Author:
Click for further information on law firm or attorney.. This article, 5 Causes Why People File For Bankruptcy is released under a creative commons attribution license.
No comments:
Post a Comment