What Are the Main Reasons People Have to File For Bankruptcy?

The decision to file for bankruptcy is a personal one for you and your family. There are many reasons to consider bankruptcy, and here are some of the most common: Getting out of credit card debt: Credit card debt is one of the main reasons why people in America today consider filing for Chapter 7 bankruptcy. You can easily become overwhelmed with credit card debt, especially when you consider the interest, late fees and other penalties, and ever-increasing minimum monthly payments. High credit card balances are one type of debt usually discharged or eliminated by filing a Chapter 7 bankruptcy. In addition, when you file for bankruptcy, the court places a stay of protection on you that stops all debt collection attempts. That includes phone calls, letters, and lawsuits. Stop a foreclosure or vehicle repossession: Many Americans have been impacted by the rise in home foreclosures since 2008 when the country experienced the mortgage crisis. People who fall behind on their mortgage payments and are facing foreclosure often file a Chapter 13 bankruptcy. By doing so, they stop the foreclosure process, find a way to get current on their mortgage, and remain in their homes. Similarly, people who are facing the repossession of their vehicles because they have fallen behind in the payments can file for Chapter 13 bankruptcy. It stops the repossession process and allows time for the person to catch up on past due payments while keeping the vehicle. Stop a garnishment: A creditor may have been granted by a court the ability to take a specific amount of your wages directly from your employer before you get your paycheck. This arrangement is called a garnishment. It may not be possible for you to pay off the debt and thereby end the garnishment. In that instance, filing a Chapter 7 or a Chapter 13 bankruptcy immediately ceases any garnishment on your paycheck. Whether or not any of these reasons are why you are considering bankruptcy as an option, contact us. Discuss your specific situation with one of our expert attorneys to determine how bankruptcy can help you and your financial situation.