6 Reasons People File Bankruptcy

The primary reason people file bankruptcy is to get out from under crushing debt and get on with their lives. But what brings people to the point that they have to consider bankruptcy? Every life is a little different, but the following reasons people file are listed below. Do any of these fit your circumstances?

#1.  Unemployment / Job Loss Can Lead People to File Bankruptcy

You might be living your life paycheck to paycheck. Then, without warning, the paycheck isn’t there anymore. Losing the source of income you use to pay your debts creates financial instability that can cause people to file bankruptcy petitions.

#2.  Unexpected Expenses Can Drain Finances

Many people have a good handle on their monthly expenses. They know when bills are due, approximately how much they will be, and how they will pay them. However, life throws us curveballs sometimes. Some common unexpected expenses include home repairs, auto repairs… and the next item on our list.

#3.  Medical Expenses – Necessary, but Costly

If you’re lucky, you have great health insurance. However, even the best policies have deductibles and co-pays. For a catastrophic illness or injuries caused in an accident, you might be facing some very large, very unexpected expenses. At some point, some people file bankruptcy as a way of addressing medical bills.

#4.  Divorce and Bankruptcy Might Go Hand-in-Hand

Financial instability precedes some divorces. For others, the instability comes after the ink dries on the final divorce decree. Either way, it’s not uncommon to see people file for bankruptcy before or after filing for divorce.

#5.  Poor Use of Available Credit, Another Reason People File Bankruptcy

Hearing that your credit company just raised your credit limit can be exciting. You just increased your available credit, which lenders often use to determine your financial worthiness. However, sometimes people use this as an opportunity to book an expensive trip or go on a spending spree. This may sound like fun until it’s time to repay your debts. Using credit unwisely has led people to file for bankruptcy.

#6.  Ran Out of Options / Negotiating Didn’t Work

You might realize that your finances are out of control. Sometimes this happens because of one or more of the previous reasons on this list. No matter how you got there, you might have tried to find a way out. For example, creditors sometimes are willing to reduce your debt. You might also have tried to increase your income to meet or exceed your expenses. Trying to avoid bankruptcy is admirable, but sometimes it just doesn’t work. You still have the debt. Creditors are still harassing you. Your final option is to talk to a bankruptcy lawyer about whether to file bankruptcy or not.

Call to Find Out if Chapter 13 Bankruptcy Is Right for You

Attorney Leslie Craft has the experience you need to deal with bankruptcy and traffic violations. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives.

Bankruptcy doesn’t have to be a painful process. To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or email us at lesliecraftlaw@gmail.com. My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City, Roanoke Rapids, Goldsboro, and Jacksonville.

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