The Great Recession may be behind us, but its effects are still being painfully felt by many people. The United States Courts website reports that, in 2013, nearly 1.1 million Americans filed bankruptcy. Millions more considered doing so. When a family finds itself buried in a mountain of debt, bankruptcy may be the only option. Because bankruptcy can be a complex process, you may find that it is in your best interests to work with Bryan bankruptcy lawyers if you decide on taking this step.
Top Ten Reasons for Bankruptcy
Every bankruptcy has its own story of financial hardship. However, certain issues have been found to most commonly lead to bankruptcy. The following are the top ten reasons:
- Financial Mismanagement: Credit is extended to Americans in unprecedented amounts today, and credit cards are easy to obtain. Even if you are a person who normally tries to be frugal, you may find yourself in over your head in debt.
- Recent Job Loss: Millions of Americans lost their jobs during the recent economic downturn. Loss of a job can devastate a family, even one that enjoys two incomes.
- Prevent or End Wage Garnishment: Debtors who fail to make payments on loans and credit cards often have their wages garnished. Having a substantial percentage of your income taken each month can be ruinous, particularly if you are already having difficulty making ends meet.
- Stop Harassment from Creditors: Recent laws have been imposed upon creditors that restrict when and how they can contact a debtor, and the manner in which this can be done. Regardless, some creditors are over-zealous in their pursuit of repayment to the point of harassment.
- Elimination of Substantial Medical Debt: One of the most common reasons for bankruptcy today is medical bills. If you lose your job, you might find yourself without insurance, and then suddenly in need of medical care. Even a person who is insured is not immune from problems, for many insurance plans do not cover enough to protect the financial well-being of the insured.
- Preventing a Car from Being Repossessed: If your financial situation is acute you may fall behind on car payments, and find that your car is repossessed.
- Prevention of Home Foreclosure: Just as with a car repossession, if you fail to make your house payment, the mortgage holder may eventually foreclose on the property.
- Reorganization of Debt: You may not want to file a liquidation of debt, but rather reorganize it so that you can pay off at least a portion.
- Prevent Utilities from Being Turned Off: A person who is unable to pay bills may fall behind on utility payments. Heating, electricity and water bills can be substantial, and utility companies can be ruthless about shutting off one’s service.
- Exposing of a Fraudulent Creditor: If a creditor fraudulently claims you owe money, a bankruptcy can force him to support his claim.
What to Do if You Need to File Bankruptcy
Before you file for bankruptcy protection, you will need to make certain decisions, such as whether a Chapter 7 or Chapter 13 is most suited to your needs. It is important that you make as reasoned a choice as possible and take all the necessary steps to avoid problems with your filing. The Bryan bankruptcy attorneys at Peterson Law Group can help you through this difficult process. Call 979-703-7014 or 936-337-4681 today to arrange a consultation.