The 5 Main Reasons People File for Bankruptcy
Bankruptcy can be a way out for most families who are overwhelmed with a lot of debt. Not only is filing for bankruptcy a big decision, it also has long-term consequences – therefore you should never take this matter lightly. However, it does offer relief for individuals who need drastic help in debt relief.
Following are the 5 main reasons people file for bankruptcy:
1. Relief from Massive Amount of Debt
One of the major reasons people file for bankruptcy is to get assistance with a financial situation that is overburdened with too much debt. Bankruptcy can help you get rid of the legal responsibility to pay many or all debts. Rent deficiencies, credit cards, medical bills, mortgage deficiencies, and utility bills are some of the debts that can be removed. Even some tax liabilities can also be removed under certain conditions.
2. Stopping Home Foreclosure
Another major reason to file for bankruptcy is to stop home foreclosure. Bankruptcy does not remove what is owed on a property mortgage. However, it allows for a sensible repayment plan and can stop the foreclosure proceedings on a home. This basically buys you some time, reforms repayment of the past unpaid amount, and brings the account current.
3. Preventing Repossession of a Car or Property
Filing for bankruptcy helps protect your assets. Filing quickly can offer protection and forces the bank or creditor to return your car or your property even if it has already been repossessed. Any past, overdue or missed payments will be integrated into your overall plan for bankruptcy.
4. Putting an End to Creditor Harassment
Some creditors can be very unreasonable, especially when it comes to collecting the amount owed to them. Some will even choose to use abusive language,bullying tactics, or demeaning comments in order to get money. Such tactics are unethical and in certain cases, they may even be unlawful. Bankruptcy can help you place unreasonable demands of creditors on hold. Creditors who are too persistent following legal proceedings to collect a debt or even calling your home to do so may be stopped altogether via bankruptcy.
5. Getting a Fresh Start
Bankruptcy is a legal way to help people get a fresh start and wipe the slate clean.The feeling of relief when your debts are reduced or discharged is incomparable. With a straight Chapter 13 bankruptcy or Chapter 7 bankruptcy, all or most of your debts can be cleared. A debilitating and extremely difficult financial situation is one of the best reasons people file for bankruptcy.
There can be many reasons to file bankruptcy. However, you should not rush toward the process. You should get the right information before making any decision about filing for bankruptcy. Sometimes you need basic information or legal help with your particular problem. Therefore, it is recommended that you consider consulting a law firm that specializes in this field and that can analyze your situation and assist you with comprehensive information on the protections available through bankruptcy.
The Travis Law Firm provides professional legal representation for Chapter 7 & Chapter 13 bankruptcy services for residents of all cities in Riverside and San Bernardino Counties. We have offices in Riverside, San Bernardino, Victorville, Temecula, Cathedral City and Ontario for the convenience of our Inland Empire, High Desert, and Coachella Valley clients. For more information about our bankruptcy law services and other legal representation, call us today at 1-800-BANKRUPT or (951) 274-9501.