Bankruptcy is sometimes looked at as a bad word, but the truth is that it can be an immense help to those who need it. Filing for bankruptcy doesn't mean you've failed. It means that you're taking charge of your financial situation and making a change.
There are dozens of reasons why people go into bankruptcy. Your reason may not be one of these, but these are a few common causes.
1. You lost your job
It's hard to know that you're going to lose your job, be laid off or be unable to work. If you lose your job, you may have some savings, but if you can't get back to work before it runs out, then you're out of luck. While unemployment compensation or severance packages are available for some, not everyone has a right to those kinds of benefits and may end up needing help through bankruptcy.
2. You have too many credit cards
Maybe it was poor decision-making or just trying to stay afloat each month, but if you have high credit debt, it can weigh you down financially. Whether it's from losing your job and putting rent on a credit card or simply buying too many items on credit, credit debt is another reason people end up in bankruptcy.
3. Student loans
Student loans themselves are only discharged during bankruptcies in very specific situations, like if a person is struggling with economic hardships. If the loans are unsecured, you may be able to have them dismissed, but secured loans may not. People end up in bankruptcy while struggling to pay these loans. Sometimes, eliminating other debts helps get them back on track. Other times, renegotiating the terms of the student loans might be possible.
4. Medical debts
After an injury, there's little you can do but seek the medical attention you need. While most people in the United States now have health insurance, that doesn't mean that bills can't add up. The cost of deductibles and expenses outside the insurance policy may make it hard to pay back the debts in full. A bankruptcy can help eliminate medical debts and get a person's finances back on track.
No matter what your situation is, it's your right to take charge and make the changes you need to get back on track. With a bankruptcy and other options open to you, your attorney can help you get back a stable financial future.
Source: Nov. 30, -0001