Ten Most Common Reasons People Want to File Bankruptcy

Today we’re going to talk about the top 10 reasons why people may want to file bankruptcy including many of the benefits that they’ll receive.

First of all would be, I think the most obvious reason is to eliminate the legal obligation for paying off certain debts. Many unsecured debts such as credit card debt, medical bills, deficiency balances on repossessed or returned vehicles and deficiency balances and mortgages that have been sold either through foreclosure or other process can be eliminated completely through the bankruptcy.

The second reason why people may want to file bankruptcy is to stop or delay foreclosure proceedings on their home thereby allowing them to make payments to catch up on any missed payments and become current with their mortgage holder again.

Another reason people may want to file bankruptcy is to prevent the car or other property from being repossessed. Obviously secure collateral such as a vehicle where a loan is directly on the item can be repossessed for failing to pay those debts. However, I think people fail to realize that other personal property can be seized by court officers to seize debts that you owe other creditors that could otherwise be eliminated through the bankruptcy process.

Another reason people would file bankruptcy is to reduce or eliminate medical bills. And at chapter 7 most medical bills can be completely discharged and at chapter 13 we would repay those at a very small fraction of what you actually owe to those creditors. Find people with protracted illnesses can often have extensive medical bills. I’ve recently had a client with as much as a million dollars in back of medical bills that we were able to discharge through a chapter 7 process.

Another reason you may want to contemplate bankruptcy is if you recently lost your job and are now on unemployment. Certainly your lifestyle is structured around the money you are earning when you are employed full time. It’s unfortunate that a lot of people are going to workforce reduction right now and people just don’t have the income that they had a couple of years ago. If you’re having trouble making your monthly minimum payments you should definitely contact our office about filing for bankruptcy and see how we can help you.

Another primary reason why people contact our office is to stop the harassing, calls and letters that you receive from creditors just to get a little peace of mind.

Another reason people should contact our office is to eliminate the harassing phone calls and threatening letters that you’re receiving from your creditors. Filing bankruptcy eliminates these types of collection efforts. Once you file bankruptcy the automatic stay goes into effect and your creditors can no longer contact you. In addition however once you retain our office you can tell creditors that you retain an attorney to represent you in bankruptcy and many of them will stop contacting you immediately even before your discharges receive.

Another reason that people would contact our office is to prevent their utilities from being shut off or to have utilities that have already been shut off reconnected. Bankruptcy can eliminate a lot of these old utility bills and help you become current with creditor thereby having power or gas restored to your home.

Wage garnishment are another reason why people frequently contact our office. If you have a creditor that is file a lawsuit against you or has already obtained a judgment against you and you are employed you better believe that they’re going to want to garnish your wages at some point. Eliminating the debt through bankruptcy can eliminate the wage garnishment or any possibility thereof.

Other things that would prompt people to contact our office are to challenge certain claims of fraudulent creditors. Once we file the bankruptcy the creditors have the obligation to file what’s called a proof of claim explaining why they believe they’re entitled to receive the amount of money that they’re claiming. If they’re unable to file a proof of claim they may not be entitled to receive anything even if they are able to show that they have avail of that which we can frequently discharge that completely through bankruptcy in a chapter 7 or eliminate most of the debt in a chapter 13 bankruptcy.