A bankruptcy filing is one of the last financial issues that any person wants to experience. When filing for bankruptcy, most people have two types of filings they may choose from, Chapter 7 and Chapter 13. Over the course of a 12 year period, from 2005-2016, there were over 12.8 million bankruptcy filings. Of these numbers, 68% filed Chapter 7 while 32% filed for Chapter 13. Determining the best one for you will vary based on your specific needs and your financial situation. A bankruptcy lawyer can help you face your bankruptcy filing in a manner that can help you have a clear idea of what you stand to face throughout the process.
The reality is, filing for bankruptcy isn’t as uncommon as you may have originally thought. What you may be wondering is what circumstances may call for someone to file for bankruptcy? Some of the most common reasons people file for bankruptcy include:
Reason #1 You Have Lost Your Job
Job loss can account for bankruptcy for obvious reasons. Should you lose your job and have difficulty finding a new one, or not be able to attain a job making the same as you did before, can make it challenging to be able to financially catch up. Just because you have lost your job doesn’t necessarily mean that your expenses will go away until you find a new one. You will still be responsible for providing for your basic needs and keeping up with your expenses.
Reason #2 Significant Amounts of Debt
Incurring debts can be a fast way of finding yourself in over your head. Making poor financial decisions can make it difficult to keep up with expenses. Holding balances on credit cards or car loans that have high-interest rates can make it nearly impossible to pay them off. It’s important that you not allow debts to accumulate by only charging what you are able to afford.
Reason #3 A Change in Your Income
Sometimes, people experience a reduction in their hours at work or may take on a job that doesn’t pay as much as their previous employer. This may make it nearly impossible for a person to continue to keep up with their standard of living. In some cases, despite cutting back on expenses as much as possible, it may not be enough to allow a person to make ends meet.
Reason #4 Medical Expenses
According to a study conducted by Harvard University, more than 62% of bankruptcies were the result of medical expenses. There are a number of reasons a person may fall into debt from medical issues. Just because you are unable to afford your medical expenses doesn’t mean you were uninsured. Facing an injury or serious medical condition can become costly rather quickly.
Reason #5 Divorce
Divorce can be a significant expense. Not only can legal fees be costly, but you may also experience a reduction in your income. This is especially the case if you no longer have the income of your ex to rely on.
Currently considering bankruptcy? There are a number of reasons people choose filing for bankruptcy every day. While each circumstance may be unique, one key theme is the reality behind your filing. You no longer have the ability to keep up with your debts. A lawyer is well aware of what it has taken for you to reach the point of considering bankruptcy. All is not lost, a lawyer can help you by stepping you through the filing process and rebuilding hope for your future. Contact a law firm today so that they can begin providing you with the guidance you need when making decisions regarding a potential bankruptcy filing.