What Are Some Common Reasons People File For Bankruptcy?

There are many reasons why people choose to file bankruptcy, but the three most common are reduction or loss of income, unexpected or long-term illness, and divorce.

I Don’t Have A Lot Of Credit Card Debt. Do I Still Need To File For Bankruptcy?

Whether or not someone needs to file for bankruptcy depends on the type of debt they have. For example, a person may have little to no credit card debt, but will have loans, outstanding debts, past due payments on their mortgage, or medical debts, and as a result, they will need to file for bankruptcy.

I Feel Guilty And Ashamed At The Thought Of Filing Bankruptcy. Will Everyone Know?

While bankruptcies are in the public record like any other type of court filing, anyone outside of the people who work in the bankruptcy court would have to specifically seek the information in order to find it.

I Can’t Make My Monthly Payments On Credit Card Or Other Debts. Should I File For Bankruptcy?

Being unable to make monthly payments on credit card or other debts is a perfect reason to file for bankruptcy. It is important for people to be able to maintain a monthly living spending plan, and if all or most of their money is being consumed by debt, then it will be difficult for them to pay their rent or mortgage, utilities, and obtain basic necessities.

Will Filing For Bankruptcy Allow Me To Eventually Have Better Credit?

Filing for bankruptcy usually improves a person’s credit score almost instantly. One of the major factors that determine a person’s credit score is their debt to income ratio, and once someone files for bankruptcy, their debt is eliminated, which means their debt to income ratio will be significantly improved. Additionally, a person’s credit score can improve quickly and drastically by making car payments, mortgage payments, etc.  Prior to filing bankruptcy, an individual can obtain a computer-generated estimate of what their credit score will be 12 months after the bankruptcy. Once 12 months have passed since a bankruptcy, most credit scores will be 80 points higher than they were prior to bankruptcy.

Will I Even Qualify For A Personal Bankruptcy?

Almost everyone will qualify for a Chapter 7 or Chapter 13 bankruptcy, the former of which provides a fresh start, and the latter of which is a complete or reorganization bankruptcy.

What Are Some Other Considerations When Filing For A Bankruptcy?

An individual’s specific circumstances should be considered prior to filing for bankruptcy. Chapter 13 bankruptcies give people the opportunity to restructure their debt and catch up on missed payments on mortgages or car loans, regardless of whether they have missed a full year of payments or just a few months.

Is Filing For Bankruptcy Difficult And Time Consuming?

Gathering the necessary documentation such as pay stubs and tax forms can take some time, but in general, filing for bankruptcy is not very time consuming.

For more information on Common Reasons For Filing Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (937) 247-6447 today.