4 Main Reasons To File For Bankruptcy
Bankruptcy allows you to have a fresh financial start. So, when should you file for bankruptcy? Read on to find out.
Unexpected Job Loss
Job loss is now a common occurrence due to the tough economic climate. Unfortunately, your employer may not even offer you a severance pay as you exit. If you have an emergency fund in place, the savings quickly disappear as you cover accrued expenses. The situation worsens if you rely on your credit card to stay afloat.
If you don't find a stable income in good time, your bills will pile, and eventually, you will have no choice but to file for bankruptcy. However, several factors (such as tax compliance and the amount of unsecured debts) will determine the success of your application. So, speak to a bankruptcy attorney for further professional guidance.
High Medical Expenses
Medical expenses pile up fast, especially if you suffer from a rare condition not covered in your health insurance. In fact, people with medical debts account for 62% of all bankruptcies filed.
Such a situation can easily wipe out all your savings and retirement funds. After exhausting every available resource, filing for bankruptcy becomes a viable option to help you back on your feet if you're deep in medical debt.
Multiple Credit Issues
With easy access to installment loans, some people cannot control their spending. Eventually, the behavior spirals out of control, and they can't pay their accumulating debts. If you lose control of your debt and have no means to pay it, bankruptcy offers you reprieve from creditors.
The bankruptcy filing process can be complicated, especially if you're not familiar with the paperwork needed for your case. In addition, the intricate law sub-sections might confuse you if you don't understand what the law says about bankruptcy. Ensure you work with a reputable bankruptcy attorney to get precisely what you need.
Rising Divorce Costs
Divorce can cause a considerable loss of assets and income for partners pursuing it. You have to factor in the legal fees (which can be pretty high in some cases), alimony costs, and child support.
Divorce also means you have to shoulder part of your ex's debts if you had a joint bank account. The debt load can overwhelm you, and filing for bankruptcy might be your only way to settle the debt.
If your financial status soars, bankruptcy offers you a clean slate to build a secure financial future. Reach out to a bankruptcy attorney with a good understanding of the legal system. The attorney will help you navigate the complex bankruptcy process successfully. They can also provide information regarding things like Chapter 13 and Chapter 7 bankruptcy.